Chancellor warned of 8bn shortfall as electric cars prompt rethink of fuel duty

Rachel Reeves is facing a projected £8 billion shortfall in Treasury revenues as the UK moves towards electric vehicles, significantly reducing fuel duty revenues. The Climate Change Committee has urged her to explore alternative tax measures, including a controversial 'pay-per-mile' system, to address the anticipated declines in fuel tax income. They predict that if fuel duty rates remain unchanged, revenues could decrease by one-third by 2030. Additionally, there is a push for reducing aviation emissions, with possible increased flight costs as a funding mechanism for greener practices.

Rachel Reeves faces an £8 billion gap in Treasury revenues due to the shift to electric vehicles, prompting calls for new tax measures such as a 'pay-per-mile' system.

The Climate Change Committee warns that without new measures, fuel duty receipts could drop by one-third by 2030, emphasizing the need for innovative solutions.

Read at Business Matters