Motoring taxation in the United Kingdom

Motoring taxation in the United Kingdom consists primarily of vehicle excise duty (commonly known as VED, vehicle tax, car tax, and road tax), which is levied on vehicles registered in the UK and hydrocarbon oil duty (normally referred to as fuel tax) which is levied on the fuel used by motor vehicles. VED and fuel tax raised approximately GB£32 billion in 2009, a further £4 billion was raised from the value added tax on fuel purchases. Motoring-related taxes for fiscal year 2011/12, including fuel duties and VED, are estimated that will amount to more than GB£38 billion, representing almost 7% of total UK taxation.

Road pricing in the form of congestion charges are in place in London and Durham. However these are generally viewed as usage charges rather than as tax for legal purposes although this interpretation is disputed by the USA and some other embassies in relation to the London congestion charge.

The history of motoring taxation was closely linked to the construction of roads until 1937, since when motoring taxation has been treated as 'general taxation' with roads competing for funds with other departments on an equal basis.

In the early years of the Twentieth Century funding for roads and related infrastructure was drawn mainly from local ratepayers and the tram companies, who were obliged to maintain the road around their tracks under the Tramways Act of 1870. The price of fuel for steam engines had been subject to local coal duties until their abolition in 1889, and centrally controlled during World War I and World War II.

...
Wikipedia