UK Must Face Up to Falling Road Emissions To Avoid Billions of Tax Gap

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The UK Government gambles sleepwalking into a £23bn tax black hole by failing to tackle road transport emissions.

The new government plans to improve the UK’s infrastructure to help boost the number of autonomous and electronic vehicles on British roadways. However, a new report from right-leaning think tank Policy Exchange has advised that the Treasury could find a hole in its expected tax revenue unless the shift to cleaner vehicles is part of a government plan.

Richard Howard, an author on the Policy Exchange report, said “the Government needs to recognize the fiscal implications of cleaning up road transport. Our analysis suggests that if carbon targets are met, fuel duty receipts could be £9bn-£23bn lower in 2030 than the Government is currently assuming.”

The Office for Budgetary Responsibility (OBR) has concluded that fuel duty receipts could increase from £28bn a year to around £40bn by 2030.

But Policy Exchange said fuel duty tax revenues would be as small as £17bn-£31bn or £9bn to £23bn lower than the OBR is trading on if the legislated carbon targets are reached.

“The OBR and Department for Transport are working off entirely different projections for emissions than the Committee on Climate Change,” Howard added.

 

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