Road tax charges should be based on individual's road usage, says report

Tax Disc . Tuesday August 26 2014. Photo credit should read: Stefan Rousseau/PA

A report by the Association for Consultancy and Engineering (ACE) has suggested that road tax should be tailored to individual drivers, based on factors such as journey length, time of day, and financial circumstances.

The group, which represents infrastructure corporations across the UK, suggested that a blanket approach to road pricing makes drivers 'suspicious' of how their money is used.

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In a report entitled 'Funding Roads for the Future', ACE suggested future road tax should ditch the carbon dioxide-based pricing structure, and instead introduce charges based on four variables. The charges would take into account the types of road a journey took place on, the time of day, how much congestion was around and the driver's financial situation – possibly giving a discount to pensioners, students or the unemployed.

ACE said of the current CO2-based charges: "The growing uptake of zero-emission vehicles means revenue from Vehicle Excise Duty and Fuel Duty will continue to decline as a percentage of the UK's GDP in the future," it said.

It also suggested that a change in social trend, including the prevalence of ride-sharing, meant there was less reason for young people to own their own cars.

"Our report argues that in the years ahead only a reformed funding regime based on dynamic road user pricing will manage traffic flows and deliver the significant investment needed to keep the country moving," said the association's chief executive, Nelson Ogunshakin.

But a spokesperson for the treasury denied that the roads were in crisis, saying: "We are committed to ensuring that our roads are fit for purpose, and that's why we are investing £15bn in our Road Investment Strategy.

"We are also supporting hardworking people across the country by freezing fuel duty for the eighth year in a row, saving drivers £160 a year on average."

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