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What Does Road Tax Pay For?

By: J.A.J Aaronson - Updated: 26 Sep 2018 | comments*Discuss
 
Road Tax Car Tax Tax Government Spending

Vehicle Excise Duty (VED) is more commonly known as road tax and is a perpetual source of political contention. The majority of adults in the UK are either car owners or regularly use a car or other vehicle, so road tax affects most of us. Furthermore, aside from the standard road tax payable to the DVLA and proved by your tax disc (which must be displayed in your windscreen), motorists are also hit by fuel duty, council parking charges, congestion charges, and all manner of other taxes.

So Where Does All the Money Go?

This is not a particularly easy question to answer. Frequently, tax rises are presented as necessary in order to cover the cost of a related expenditure. For example, the London Congestion Charge was supposed to pay for new upgrades to the Underground network. However, there is really no way of telling whether or not this is the case, as all tax income ultimately ends up in one of two places, depending on the tax.

DVLA Road Tax and fuel duty both end up in the coffers of the Exchequer, along with your income tax and companies' corporation tax. Council parking fees, along with the Congestion Charge if you live in London, are paid to the Local Authority, and are topped up by council tax and a subsidy from central government.

As can be seen, it is therefore very difficult to detail exactly how your road tax is spent, because it is divvied up in the same was as any other tax. However, there are certain related expenditures that we certainly rely on road tax and fuel tax to pay for.

Infrastructure Projects

Infrastructure projects are among the most important motoring-related expenditures. These include new road building and widening, tunnel construction and so on. These projects are frequently carried out in partnership with a private company, using a system known as a Private Finance Initiative (PFI). There are a number of notable PFI infrastructure projects including the Skye Bridge, for example.

Private Finance Initiatives are a useful tool for the government, as they allow massive new infrastructure projects to take place 'off balance sheet' – that is, the cost of these projects does not contribute to the national debt. PFIs have, however, ground to a halt in recent months as the private sector is finding it increasingly difficult to secure funds to carry out the projects.

Local Government Projects

Motoring taxes paid to a council are more easily traced to their eventual expenditure, as the projects they pay for tend to be concentrated in a smaller area and therefore more visible to residents. For example, your parking fees might well help pay for extended car park facilities, while your resident's parking permit is probably contributing to road resurfacing or a similar project. As has been mentioned, though, council income is topped up by central government – so,ultimately, you are also paying for these projects and services through your Council Tax and Income Tax.

Many drivers complain that the costs of driving are unfairly inflated by tax, particularly in the price of petrol. There may be some truth in this; driving is an easily taxable activity, because it is a necessity for many and individuals do not see the cost coming directly from their wage packet. However, it should be remembered that without these taxes both central and local government would find it even more difficult to carry out the infrastructure and repair projects on which a modern society relies.

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I see a fair bit of pothole repairs, the biggest problem I see is the work carried out is very poor indeed more often than not as soon as the job is done the tarmac comes out again. I kid you not one hole was back again within three days. In my opinion if the work carried out was done properly in the first place, it wouldn't cost the country no where near as much in the long term.
Storm - 26-Sep-18 @ 8:46 AM
And what about bike riders, pot holes are damaging factors to cars, i understand as I already had to fix 2 suspension struts and 3 new tyres in 2 months, but LETHAL obstacles to motorbike riders. Riding round a corner tilted at an angle, (even at 30 MPH) and hit a pot hole, that is dangerous to life! Irritatingly road tax cannot be avoided due to new laws allowing the uplift and destruction of any car/bike not taxed EVEN IF ON PRIVATE LAND. Taxes paid should be devoted to the purpose the taxes are due! We pay National Insurance at an increased rate from previous years with no pay increase within the NHS or increase in resource, we continue to pay council tax at the same rate or increased and yet the bin collections are, at the very least, picked up in around 50% less of the time through the year from previous. Every country is in dept and yet we are meant to be within the top 10 richest countries in the world and we can't afford to repair roads to make safe for road users but we can build a new forth road bridge (queensferry crossing). And like previously said, lesser off countries are managing to have good quality roads. China had a full road/bridge collapse and managed to rebuild it within a couple of weeks a good few years ago and yet it takes 6 months for some lazy *ss council workers to fix a 10 inch wide pothole! I think the people within government need to take a step down, live a working class life with a car not chauffeured and paid for by TAX PAYERS MONEY and start realising how detrimental the infrastructure of this country is and how it is affecting the tax payers, (when they are paying it out their pockets, no loopholes allowed) who don't feed from the silver spoon
Paul Martin - 29-Jun-18 @ 11:51 PM
I read that they can use plastic waste to resurface road and it last longer. So why don’t the government and councils look into doing this for all our roads in the UK. USE THE MONEY FROM OUR ROAD TAX TO INVEST INTO THIS. ALSO FOR FOOTFATHS THAT ARE BAD.
Grandma G - 29-May-18 @ 10:47 AM
I couldn’t agree more.....the roads are so bad now that you spend more time watching for holes than watching what you should be. What would be the outcome of having an accident because you were so distracted by the state of the road surface. I think we should all stop paying road tax until it’s sorted. We pay so much out in tax one way or another we have a right to expect something back for it.
Jim - 28-May-18 @ 7:56 AM
@Tez - I can't see everyone doing that though. There are too many people who wouldn't take that risk.
Max - 30-Apr-18 @ 2:57 PM
Don't pay road tax and don't pay the fine either, "EVERYONE" it's the only way.
Tez - 28-Apr-18 @ 10:19 AM
@Poz - excellent observation. Like it; 'potholes are the new speedbumps'. I think the thing is though that potholes are naturally there and mostly in unwanted places and speedbumps are there for a particular reason.
XS - 9-Apr-18 @ 12:00 PM
Instead of local authorities installing speed bumps. Why not use the money to repair our crumbling roads..because as far as I can see potholes are the new speed bumps
Poz - 7-Apr-18 @ 9:45 PM
@Kaz - absolutely. The roads are absolute *^&%. It's dangerous because if you see a pothole the natural response is to try to avoid it, which can cause accidents. What happens if you're a cyclist and you see one, it's more dangerous for them. What do you do, risk falling off your bike and injuring yoruself, or swerving in front of a car and possibly killing yourself? I'm surprised no one has been killed this way yet.
PhilN - 27-Mar-18 @ 12:44 PM
If we are paying to drive on the roads the road tax/vehicle excise duty etc, should be used to repair the roads, not put into a pot and divied up for new projects like building new houses etc, and look after what is already about that needs to be addressed/repaired, etc. On a different link on the same subject it stated that part of our council tax pays for the roads to be repaired. So where is the money going? Government need to start listening to the public that pay council tax and road tax for such services and their wages.
Kaz - 20-Mar-18 @ 10:54 PM
@DG - apparently two million more vehicles have been affected than two years ago and potholes have cost British drivers an estimated £915 million in car repairs over the past year. I just read this in a newspaper article, so it definitely needs to be addressed.
Gil. - 20-Mar-18 @ 3:54 PM
Can we not start a petition for the government to start looking after roads.Not filling the odd pothole but resurfacing areas.Go anywhere in Europe and the roads are magnificent even rural area in Spain have beautiful roads. British roads are 3rd world condition and in the meantime, our vehicles are been ruined. Yesterday I drove over two different potholes and could not swerve due to oncoming traffic.The potholes were approximately 20 inches wide and deep. Are the councils paying the staff too much money????
DG - 20-Mar-18 @ 1:02 PM
@Jocky77 - I heard about this. I saw a person from the council come to fill in a hole in the road. There were around six or seven holes of varying sizes, he only filled in one, got back in his van and drove away. Bonkers!
MaccyD - 9-Mar-18 @ 12:06 PM
@Bert - yes, but then we'd all get fined and then the government would be rubbing their hands together in glee.
Chrissy - 9-Mar-18 @ 11:42 AM
Just watched tonight show on itv, Britain’s roads are a mess, people seriously injured or killed by potholes they dont care! Where’s the money to repair roads going? It’s ridiculous!!
Jocky77 - 8-Mar-18 @ 8:46 PM
I really don't understand how the government can justify Tax( known by many as "road tax") paid by the motorist can be just dropped into the exchequers coffers. Meanwhile people particularly on bicycles are being killed, vehicles are being damaged, andif proven is costing local councils a fortune. Ultimatly the government is raking in millions of vehicle tax funds and clearly not re investing the money where it is needed. I call that fraud.
Eeky - 8-Mar-18 @ 8:19 PM
I think we should all stop paying road tax that will give the government some thing to think about there just crocks
Bert - 8-Mar-18 @ 7:54 PM
@marley - Well that is absolutely ridiculous. So if there is a pothole in the same road, they would leave the other one as it hasn't been reported. What a joke! I have just ruined a tyre because of one that I didn't see coming :(
SilviV - 26-Feb-18 @ 11:01 AM
Wow so agree with many comments here re blasted pot holes!here in Hertfordshire is same, its dodge the potholes on your journey to work, bloody nightmare, they fill one up by end of week its back again.Ringway contractors who work for Hertfordshire Highways says that their system only allows one pothole at a time to be repaired eg: if there are say five in same road they only fill in the one that has been reported on their system???bloody disgrace
marley - 25-Feb-18 @ 7:17 PM
@JillyDancer - potholes have become my bugbear - they are TERRIBLE in Liverpool. you can't go 100 yards without the car falling into one. Something will have to be done, they cannot keep patching them. It's like attempting to put a sticking plaster on a gunshot wound!
BiGJan - 7-Nov-17 @ 3:34 PM
To those who say VED pays for roads. There is no direct payment, it goes into a general pot. So you think you are paying a disproportionate amount? Well, consider this please.. Almost all the damage done to infrastructure is caused by vehicles. Same for pollution. Now let's say I don't drive and walk most places..on longer journeys I ride a push-bike. I am paying for roads indirectly, through general taxation. I am paying for all the damage and pollution I have no caused. Do I get a rebate? Does everyone else in the same position? Now compare that huge figure with how much more you think you are really paying than pedestrians and cyclists. Even if I used an electric car, I am still causing damage. So in the future when electric cars become more popular we are still going to be in a similar position. If anything, I suggest everyone here stands together in holding the government to question over where this loss of revenue (from less pollution) is going to come from. A hike in general taxation, that's where, in my opinion. We are ALL going to get stung. Now add to this the state of public transport in this country..what is going to be done about that? Especially when this government insists on increasing the population by a factor of millions through one form or another. But if you want to keep fighting between yourselves then fine..just remember who you are all really fighting for (it's not you).
JillyDancer - 3-Nov-17 @ 7:59 PM
I think it is highly wrong of you to mislead the public by constantly referring to a non-existent tax (road tax). The tax paid on cars is based on emissions - there is no tax on roads, no fee, and no more entitlement to our roads than others. We all fund roads. By referring to a non-existent tax your only serving to confuse and in worse cases, polarise viewpoints including those who take to our roads thinking they have a right to force other people out the way by any means necessary. It helps nobody.
Jeka - 3-Nov-17 @ 7:49 PM
@Pothole dodger - I so know what you mean here. There just seems to be more and more and they are deeper and deeper. Try driving through the outskirts of Liverpool, it's like an assault course!
JoJ - 6-Oct-17 @ 2:13 PM
Why is the government fraudulently charging us for road tax when the roads are a disgrace Before I leave my house I have to plan a route to try to avoid the ridiculous state of the roads in Huddersfield . I’m forever putting new ball joins and bushes on my vw van, of course we all know what’s happening to our hard earned road tax money it’s the dirty thieving government throwing champagne dinners and giving each other back handers , the roads in the centre of London are pothole free !! Shame on you fraudulent government scum!!
Pothole dodger - 3-Oct-17 @ 7:45 PM
@Tex - yes, but rising car insurance has nothing to do with the roads, that's to do with people claiming whiplash everytime they have a slight bump. I very 'slightly' clipped the side of someone's car when I was reversing out of a car parking space, no damage apart from a 2 inch scratch. The owner happened to be in it at the time. She claimed for whiplash and the car being a write-off. Absolutely unbelievable, seriously. I really don't know how she got away with it. She was off work for weeks and then said she couldn't drive. She laid it on so thick. Too many potholes in the road that need repairing, but, you can get lower road tax or no road tax if you buy the right car. I will however agree with you on the price of food and fuel.
Mike - 29-Sep-17 @ 3:18 PM
So road tax pays for the up keep of roads... Council tax does that aswell though so shouldn't it be one or the other or combine the two and give us a tax break? It's getting harder and harder to live what with ever rising car insurance aswell as extortionate prices for energy , fuel and food. It's a disgrace, something needs done and all this reviewed. Now I'm not niave enough to think JC is the answer and no that's not Jesus Christ but the government needs to address this. lower council tax or road tax it's that simple.
Tex - 29-Sep-17 @ 7:54 AM
Its all a scam road tax we pay then theres the council tax ment to help pay for roads as well feull tax again so 3 taxes for same plus halp the road we lose to cyclists we get ript of oh and income tax pay for it' wheres robin hood we need him
Peter - 17-Aug-17 @ 1:15 AM
We all hate paying tax, and as a car driver I pay a double whammy both in road tax and tax on fuel.If we have to pay a road tax then it should be fair, and it should be applied to 'all' road users, that includes bikes. This discussion is about tax however now I'm on my soapbox as a car driver who has been on the receiving end twice of bad cyclist, both jumping red lights, I would also call for cyclists over 16 to have at least third party insurance, the same as all road users.Cyclists have no financial liability at all with regards road use, or damage caused by accidents.
Cyclist V Cars - 1-Aug-17 @ 2:28 PM
To Anna B, you say cyclists take up less room than cars.Well, we are now getting told that we should give cyclists as much room as we give to a car, which means they effectively take up the same room.In addition to that, cyclists are much slower than cars, which means they hold traffic up and cause them to slow down and speed up all the time, meaning more fuel is burnt thus more air pollution.Don't get me wrong, I think it's better if people can use bicycles (considerately) in some areas, but in others they are at best a nuisance and at worst dangerous.
Mark M - 20-May-17 @ 12:23 PM
To the cyclists who say road tax doesn't pay for the roads - well, maybe it doesn't directly, but of course it will filter through.Do you honestly think there would even be roads in most places if there were no car, lorry drivers etc on the road?Cyclists would have to get by using mucky tracks.
Mark M - 20-May-17 @ 12:13 PM
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