Use Tax Exemption To Tackle Congestion

As a way of tackling road congestion, 50cc mopeds should be exempted from vehicle excise duty (VED) say the British Motorcyclists Federation.

Responding to the Government’s consultation paper on reforming motorcycle tax*, the BMF say that if the Government is serious about investing in more efficient transport, waiving the current £15 annual duty for mopeds could be a seen as a cost-effective investment in the provision of alternative transport.

Also suggested in the BMF’s five page response are: revisions to the vehicle excise duty (VED) bandings to better reflect the various powered two wheeler (PTW) categories; better methods of VED collection; maintaining the differential between motorcycles and small cars and exemption for ‘classic’ machines over 25 years old.

Rejecting the consultation paper’s submission that larger motorcycles are used mainly for leisure and should therefore pay a higher tax, the BMF point out that many larger capacity motorcycles are also used for business and commuting purposes and therefore help cut-down traffic congestion. Further to this, a £5 increase, applied last April to all machines over 250 cc, is already bringing in extra revenue.

The effects on congestion through the use of motorcycles were last estimated in 1965 say the BMF, before gridlock, before parking shortages, before single-occupant cars clogged commuter routes, therefore, making the case for the changes, the BMF point out that all PTWs help in:

* Reducing traffic congestion – Irrespective of engine size, the PTW makes better progress in traffic than a car, so reducing both congestion and pollution. Cars may have a greater potential capacity for passengers than PTWs admit the BMF, but in practice, most have single occupancy. Public transport, particularly in London, is operating beyond its capacity so the PTW, in all its forms, should be regarded as a legitimate alternative.

* Tackling climate change – The smallest machines will use the least fuel and hence produce the least CO2 . Cars, locked into stop-start cycles, dramatically increase fuel consumption/CO2 emissions, while even the largest motorcycle can continue to make progress and thus use fuel more efficiently. No matter how efficient a car’s engine, it will do zero mpg when stationary say the BMF.

* Providing access to affordable transport – In general the smaller machines are the most affordable in addressing social exclusion where public transport is limited and distances are too great to walk or cycle. However, for long-distance commuting, a medium to large machine may be necessary as a cheaper, more efficient option than a car or even public transport.

Exemption for older vehicles

The BMF also say that the exemption for older vehicles should be restored to a rolling 25 years as had been introduced originally. Justifying the suggestion the BMF says that the energy and pollution used in building a replacement motorcycle is significantly greater than that used by the older vehicle for the remainder of its low-mileage life.

VED Evasion

On VED evasion, the BMF say the current VED enforcement regime offers only penalties rather than incentives to comply. The BMF considers that a review of payment methods should be undertaken with a view to adopting a more flexible approach such as payment by credit card, payment stamps, or instalments, so making payment easier and encouraging compliance.

Commenting on the consultation, BMF Chief Executive Simon Wilkinson said: “Last year’s £5 increase on larger machines more than compensates for the moped exemption that we now propose. Further, we see this as real opportunity to truly reform the way the PTW is regarded as a viable and legitimate means of personal transport.”

The BMF recommends that the new VED bands should be:

Up to 50cc: Zero;
51cc to 125cc: £15;
126cc to 400cc: £55;
401cc to 600cc:
£60 601cc and over: £65

Existing rates:
Up to 150cc: £15;
151 to 250cc: £40;
251cc and over: £65

Note: Originally, VED rates were established in relation to road track costs i.e., the costs associated with road wear and maintenance for each class of vehicle.

Road track costs have since been succeeded by marginal costs but it remains question able as to whether they have been taken into account in considering motorcycle VED rates, particularly for the highest band in relation to those for cars.

*DVLA Consultation paper on: