Car tax, or more accurately, Vehicle Excise Duty (VED), has been a contentious issue in the UK for many years. With constant changes to the rates and the way in which it is calculated, it can be confusing to understand the history of car tax in the UK. In this article, we will take a closer look at the origins of car tax and how it has evolved over time. We will also explore why it is not actually called car tax.
Origins of Car Tax in the UK
The earliest form of motoring taxation in the UK dates back to 1888 when a law was passed that required all vehicles to display a registration number. This was done primarily for identification purposes, but it also served as a way to ensure that vehicles were properly taxed.
The first road tax was introduced in 1904, when the Motor Car Act was passed. At this time, car tax was based on the horsepower of the vehicle. The more horsepower a car had, the more tax it was required to pay. The money raised from car tax was used to fund the construction and maintenance of roads.
Changes to Car Tax over Time
Over time, the way in which car tax was calculated changed. In the 1920s, car tax was based on the weight of the vehicle. By the 1930s, it was based on the engine size. In the 1960s, car tax became linked to the vehicle’s emissions. More recently, car tax rates have been based on a vehicle’s CO2 emissions, with higher rates being charged for cars that produce more pollution.
One of the biggest changes to car tax in recent years was the introduction of the current system of car tax in 2014. This new system was designed to be more environmentally friendly, with lower rates for cars that produce less pollution. Under this system, new cars are charged a higher rate of tax for the first year, after which they are charged a lower standard rate.
Why It’s Not Actually Called Car Tax
Despite being commonly referred to as car tax, VED is not actually a tax on cars. Instead, it is a tax on the use of vehicles on public roads. The money raised from VED is used to fund the construction and maintenance of roads, as well as to fund other transport-related projects.
The reason why VED is not called car tax is because the term “tax” implies that it is a general revenue-raising measure, rather than a specific tax that is used to fund a particular service. By calling it a vehicle excise duty, the government is able to make it clear that the money raised from VED is being used specifically to fund the construction and maintenance of roads.
The history of car tax in the UK is a long and complex one. From its origins in the early 20th century, to the current system of VED, car tax has undergone many changes over the years. Despite being commonly referred to as car tax, VED is not actually a tax on cars. Instead, it is a tax on the use of vehicles on public roads, and the money raised from it is used to fund the construction and maintenance of those roads.