Well, it looks like our govt have found another way to tax the motorist.
www.tinyurl76126
....I stumbled across the following text cut and pasted from the appropriate site:
In order to recover the significant costs associated with changes of ownership of vehicles, a number of revenue raising ideas have been considered by the DVLA Steering Committee and the firm favorite is apparently akin to the Stamp Duty applied to house sales.
This scheme recovers a percentage of the declared purchase price or the current market value of the vehicle (whichever is the highest). A figure of 1% for prices up to £5000 escalating to around 5% for excecutive vehicles and 4 wheel drive/SUV type vehicles.
The current view is that commercial vehicles, vehicles for the disabled, charity and non profit making organisations should be exempt.
How they determine what you or I paid for a vehicle or its condition etc I don't know!
I have to say, this takes the biscuit!
H
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Sounds like an April Fool to me.
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Nope. This is one of the proposals on the table.
This is happening more and more all the time. Stuff we've already paid for their asking us to pay again, and again and again...
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Stamp duty every time a car is sold/bought is standard in NSW, Australia. Basically when you sell a car and send in the rego form you declare how much you bought the car for, buyer does the same but has to pay stamp duty and rego fee. The two values are meant to agree!
StarGazer
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If they bring this tax in, what other tax (motoring or otherwise) will they reduce? Surely they will not want to increase the overall burden of taxation?
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If they bring this tax in, what other tax (motoring or otherwise) will they reduce? Surely they will not want to increase the overall burden of taxation?
I'll have a pint of whatever The Lawman's drinking. :-)
Would the 'work around' be that both parties in a private sale agree to declare the sale at the same, reduced, price?
And what about vehicles passed down through families, for example the Mini Cooper I'm the current keeper of was originally owned by me for 2yrs, then given to my mother briefly, then my brother used it for a couple of years and now I'm back in the chair. Each time no money has changed hands, would the DVLA believe this?
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Each time no money has changed hands, would the DVLA believe this?
Truckosaurus:
Read my initial post. It states that either the value of the car or its purchase price would attract the purchase tax - whichever is higher.
H
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Thanks Hugo, I'll be more careful next time. :-)
I guess that would mean having a Government approved 'price list' for every vehicle type on the road which would need updating monthly like the Glass's Guide. Probably more hassle than just keeping the current system.
The best approach, if funding was the noly option, would be to charge a flat admin fee of £5-10 for each change of keeper.
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It was considered that selling a car for more than you bought it for should attract some kind of capital gains taxation. The problem with this is that cars depreciate. So if I had bought the car for £1,000 and then sold it for £1 surely I should be eligible for a rebate ? HMG then decided that this probably meant that they would los eout.
Essentilly therefore a "contract" tax is required. The flaw in this is that given the justificationis the administration involved in transfer of ownership, that does not cost any more to do for a expensive car than a cheap one.
I think that we need to all go back to speeding past cameras to get their revenue back up to what they were expecting and to save them having to get desperate and start scratching around like this.
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Gents
Artful dodger hit the nail on the head :)
H
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Obviously having to pay the DVLA upon a change of ownership would do wonders for the accuracy and reliability of the database, rather than providing (another) incentive to transfer the car into a false name...
Of course, to a certain extent, cameras, insurance, tax and the like already provide this incentive, so I'm not saying that this should never happen for that reason, but I'm not at all convinced by the idea that something that is funded out of general taxation (VAT on cars/motoring products, fuel duty, VED, etc. for a start) should then also impose a further charge at the point of use when
a. to do so would make the service less, rather than more efficient and
b. there is no particular policy reason to discourage the behaviour, nor any elasticity of demand to enable a rationing function (other than by way of non-compliance, of course).
Also, I'm concerned that someone buying a £30k Mercedes would have to pay £1,500, yet someone buying a £200 Metro would only pay £2, as the function is the same and is a way by which central government would impose a pure revenue-raising (rather than cost-neutral) function on an administrative area of government. The administrative costs of establishing that a car was sold at something other than market value would also be astonishing - e.g., I can go and buy a 130k mile, 51 plate 406 2.0 GLX for £1k less than any other similar car in a commercial transaction, but how on earth would they establish that it was below market value or not?
Stamp duty serves a valuable function in terms of regulating house prices and preventing people from diverting even more of Britain's wealth into land and housing stock and so indirectly encourages capital investment in other areas, which helps long-term productivity. The government has moved away from imposing it on other forms of transfers, making various transactions non-dutiable, or fixed at £5, over the last five years or so and so it's hard to see what function it would serve here.
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How on earth did I miss Hugo's last comment...
I blame Thommo.
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"there is no particular policy reason to discourage the behaviour, nor any elasticity of demand to enable a rationing function (other than by way of non-compliance, of course)."
Er, precisely.
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David
I nearly fell off my chair when I read your last two posts!!!
H
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