Where Does Our Car and Road Tax Money Go?
It may not surprise you to learn that a quick internet search of forums and discussion boards in regards to road and car tax will net you the result that most people do not know exactly where the money they spend on car and road taxes goes – they only know that the money does not go to fix the roads. This is a misnomer, as some of the money does indeed go to repair roads and support the infrastructure. There are other uses for the car and road tax that may not be apparent or obvious to the average citizen.
Just where is all the Road Money
While on the face of things, it may seem that all of the money collected as car and road tax should go to fixing roads and other infrastructure items like bridges and toll ways, this is not exactly the case. Breaking down the exact use for the money in question is actually very difficult. There are entire laws that govern the use of the monies collected. In general, the money goes to several key places and programs. Further complicating matters, it is not just car and road taxes that are used for these programs. Taxes on fuel, parking, congestion and several other taxes and charges are combined to fund the programs.
DVLA car and road taxes as well as the fuel duty are both placed in the Exchequer along with corporation taxes and income taxes. Local Authorities collect Congestion Charges and Parking fees. When you consider this, you may be able to see why it is so difficult to figure out just what the money is actually spent on. There are a few, very specific, uses for these monies.
Road Tax Funds Infrastructure
Some of the largest projects in the country related to car usage are infrastructure projects. These are expensive projects that are necessary to maintain and improve the condition of the infrastructure throughout the country. Some examples of these projects are the building of new roads, widening of previously built roads, building of tunnels and bridges, maintenance of current roads, and general road repair. Many of these projects are carried out by a partnership between the government and several different private road companies. Under this system, known as the Private Finance Initiative or PFI, some of the largest and most visible infrastructure programs are created, implemented and finished.
A perfect example of an infrastructure program with a Private Finance Initiative partner is the Skye Bridge. The government loves to use this system as it is an exceptionally handy tool for them to complete larger projects. Basically, BPI allows some of the largest infrastructure needs to be met ‘off the balance sheet.” In other words, the cost associated with these massive projects does not add to the growing national debt. Unfortunately, due to the increasing difficulty in securing funds to carry out large scale infrastructure project, the use of the Private Finance Initiate to finance and complete projects has slowly ground to a halt.
Government Road Projects on the Local Level
When paying taxes at the local level, it is much simpler to trace where the money goes and how it is spent. This is because these monies are typically used to fund projects on a much smaller scale that are far more visible to local residents. For example, the fees and taxes you pay for parking may be used to help fund an extended car parking facility or your parking permit gees could go to re surface the roads in your local area. Do not forget that the local council income is supplemented by the central government as well, so in theory both your income tax and your council tax are used to fund local road and parking projects as well.
Attitude to Road Tax
There is a high degree of dissatisfaction among many of the nation’s drivers. Many citizens feel that they are being unfairly taxed. This is especially true in the case of taxes on petrol. The trouble is driving is one of the most easily taxed activities out there. Almost every needs to drive, making it an ideal thing for the government tax. It can be frustrating to the average citizen who may feel they are being unfairly taxed without seeing much in the way of returns. It is important to realize that the cost associated with building and maintaining roadways and other vital parts of the infrastructure are expensive propositions. Without the help the help of the taxes, it would be nearly impossible to do so. As a society, we rely on the roads, bridges and toll ways as vital parts of our everyday life and our tax money is needed to keep them running smoothly.
Which Road Tax Band is Your Vehicle in?
Use the form below to find out what your car CO2 emissions are and hence which road tax band you are in.