Thursday, 24 May 2012

Why I'd love to pay Vehicle Excise Duty

I shall start this blog with a statement that may seem rather odd to many people out there.

"As a cyclist, I would love to be able to pay Vehicle Excise Duty for my bicycle."

I can hear the outcry from cyclists now, and the cheers from many drivers.  If either of these is your reaction, I'm sorry, but you've got it the wrong way round.  Cyclists should be begging the government to let us 'pay road tax'(1), and car drivers should be pleading for cyclists current exemption to stay.

Why should cyclists be begging for a tax disc? Simple, once we have one, the argument of 'but I pay road tax' is gone.  Having a tax disc would cost cyclists nothing.  The VED on a vehicle that emits up to 100 grams of carbon dioxide per kilometre is £0 per year(2).  Since this is based on the vehicles emissions, and not those of any drivers or passengers, all bicycles would be in this group.  Since all modern bikes already effectively have a registration number in their unique frame number(3) this could be used on the disc instead of a number plate.  The tax disc could even help to serve as a theft deterrent, I would suggest that they should be in the form of a tough to remove sticker with an identifying code that is easily scanned by the police to check that it is in date, and that the rider is either the owner of the bicycle, or has permission from the owner.

Maybe the state should even hold a list of frame numbers, which are held against a registered owners name, much like the V5 for a car.  The fact that this list is held by the state for cars is part of the reason that relatively few cars are stolen.  It is easy for the police to check if a car is stolen, using it's registration number or its chassis number, this can't happen with bikes, as there are about 6 different places that a police officer would have to check to find out if a bike is stolen.

So far I think that I've built a fairly basic case for having a state controlled database of all cycles, based on the frame number, and for why cyclists would want to pay Vehicle Excise Duty.

I can see all the car drivers nodding along, this is what they've been telling us all along, cyclists need registration plates, and to pay our road tax, and to have insurance...

Sadly, they are fighting the wrong battle, they've just not been told yet.

Why are they fighting the wrong battle? It's because they haven't thought it through fully yet.  Let's run some numbers about shall we?

In 2010 (the year I can find best figures for at the moment) 3.5 million bikes were sold(4).  That's 3,500,000 bikes, or around 9600 bikes sold per day, every day of the year.  The cost to issue a tax disc in 2012 is £1.65 per disc(5).  Therefore just for the 3.5 million bikes that were sold in 2012, their first tax disc would cost the tax paying public £5.7 million.

That's before we've added them to the big database of bikes frame numbers that would need to be created and maintained, and the large number of bikes that would need a renewal disc.  In 2009 3.4 million bikes were sold in the UK(6).  Reissuing those bikes with a tax disk in 2010 would add an extra £5.6 million to the cost of issuing tax discs.  Assuming that the growth in cycle sales stayed steady into 2011, we would expect that 3.6 million bikes would have been sold in the UK in 2011, and a further 3.7 million will be sold in 2012.  If all of these remained taxable (and let us not forget, that bikes are far less likely to go wrong mechanically than cars are), that would give a cost of £23.4 million just to produce tax discs for every bike sold in the last 4 years.

Given that the current cost of issuing tax discs just to cars is estimated at £90.7 million per year(5), it is hard to see the justification of adding an increase of over 25% to the cost of this, for no gain in revenue coming in to the government.

Where would the cost of that increase in the cost of issuing tax discs go?  Either it would have to be paid through general taxation, and so everyone would pay for a scheme that if implemented correctly, would be of benefit to very few people, OR it could be paid for by increasing the cost of Vehicle Excise Duty to take into account the extra overheads.  This would mean an increase of over 25% for most drivers, just so that the demands of a few who think that 'road tax' still exits can be met.

Drivers therefore should be demanding that the status quo of cyclists not paying Vehicle Excise Duty is not changed, as it it likely that they will end up paying for my tax disc

  1. Yes, I am fully aware that road tax no longer exists (see