Public finances must adapt to a future without fossil fuel cars but the Treasury will find it hard to take the loss when the cash cow of £28bn in annual fossil fuel taxes dries up, warns Chas Roy-Chowdhury, head of taxation at ACCA
In July the UK announced that it would follow France and ban new fossil fuel cars from 2040. From an environmental point of view this represents a welcome commitment to more sustainable forms of transport, such as the electric car, and it really seems like a great leap in the right direction.
Yet given the present infrastructural focus on traditional fossil fuel transportation, and the revenues generated from taxation, it is important to consider the details of what such a policy could mean. Let’s try and look at some of the underlying points in the message.
First off the announcement seemed to be solely about cars: to what extent lorries and vans will be brought within this bold initiative, if at all, is not clear. Despite recent innovations it is not certain how easy it will be to electrify long-haul freight journeys in the near future.
