This blog will answer the question “Does council tax pay for roads?” It will cover all the various sources of funding for road tax, the details regarding road and vehicle tax. Along with all this, the blog will cover the basics of council tax, and enumerate the other areas and services that council tax pays for.

Does council tax pay for roads?

Yes, council tax pays for roads. Council tax includes payments for various services provided by your local council, roads being one of them. In this regard, the council tax funds pay for providing Transport services, carrying out Highway and property maintenance and dealing with street lighting and cleaning, and road maintenance. 

Who all pay for roads

You pay for roads even if you don’t drive on them. The taxation system in the UK is not divided as such, meaning one set of tax funding is not used for one set of services. Rather, all the income received centrally goes to one consolidated fund, that is the treasury’s pot of cash. This cash pays for all the central services provided in the UK.

No tax in the UK is in such a way that it is paid for by one set of users, and spent on that set of users.

Therefore, various sources from where the funds for road maintenance are derived are:

  • A part of the income tax of all the taxpayers goes for road maintenance
  • Council tax collected by various local councils includes services for roads
  • A portion from VAT is also dedicated to the national roads and highways maintenance
  • The business rates payments made by businesses, which go into the national coffers are also used in road maintenance.

Besides all these, the government allocates a set budget to the Department of Transport for infrastructure improvements. The developments of smart motorways, creation of new roads, busy junctions, etc., all come under the jurisdiction of the department of transport. A proper budget planning is needed for this purpose.

Road tax versus Vehicle tax

There is no such thing as a ‘road tax’ in the UK.  as the phrase suggests, ‘road tax’ does not mean the tax you need to give to drive on roads. It did exist – before 1937 – and has been abolished since. The tax that is levied is car tax, or the Vehicle Excise Duty, or a VED. These are the charges on vehicles due to their emission, and not on roads they travel on.

A car bought in the UK and only kept and driven anywhere outside the UK has to pay the VED because VED is not a tax on the road, but on the car, which was bought in the maximumfundingUK.

The cost of roads is borne by the general and local taxations, while the motorists bear the cost of vehicle emissions. Therefore, by way of general and local taxation, everyone pays for roads and everyone has an equal right to use the roads.

A car tax or a VED is a charge on vehicles that emit more than 100gm of carbon dioxide per km. The vehicles which emit less than this amount of CO₂ are exempt from car tax. These include electric cars and low-emission cars. Electric cars having an external source of battery, not connected to power while moving are exempt from taxation.

Public or other buses are also liable to pay vehicle tax. However, they receive heavy discounts on their taxes because they provide service to the public, and calculating per passenger, they are a lot more efficient than cars.

Besides these, Land Rovers used by farmers who travel only a mile or so on public roads are exempt from paying the VED. bicycles are exempt from VED as they emit no CO₂, and thus are Band A vehicles.

A vehicle exemption is applicable if the vehicle is registered belongs to a disabled person, and nods to the company it is working for. The company’s conditions where the exemption is applicable are the higher rate mobility of the Disability Living Allowance or the enhanced rate mobility in case of Personal Independence Payment, or payments are given to war pensioners or armed forces.

All such vehicles that provide transport to disabled people, except ambulances are also exempt from paying vehicle tax.

Mobility scooters, powered wheelchairs and invalid carriages are exempt from paying vehicle tax if they have the maximum on-road speed of 8mph, along with a device limiting the maximum pavement or footpath speed to 4mph.

There is no vehicle tax on vehicles older than 40 years old.

This implies that even vehicles that are not driven on public roads, on private roads, have to pay the VED.

The responsibility to pay for vehicle tax falls upon the owner of the vehicle. The payment itself can be made by any person, but the responsibility falls upon the owner of the vehicle to ensure that the vehicle tax is eventually paid.

The vehicle tax paid by you goes to the building of new roads, widening the already existing roads, constructing tunnels, and all those things which contribute to easing the drivers’ lives since it is they who are paying this tax. This money also goes to your respective local council and the related service provided by them such as road resurfacing, filling up potholes, improving car park facilities, etc.

What all council tax pays for

Council tax funds pay for a plethora of services in your locality. 

The following points enumerate what ways council tax money might be used in:

  • As care services for older people and people with physical or learning disabilities.
  • Used for implementing change programs across adult social care called Your Life Your Way, helping people remain independent for as long as possible.
  • To provide high-quality leisure facilities, libraries, and a customer service network. 
  • Economic regeneration supports a range of activities, including specific support to enable the high street and businesses to recover from the pandemic.
  • Targeted protection for low-income families through a year one extension of the Council Tax Hardship Fund
  • Housing and Public Protection, development of housing companies.
  • Providing services such as drainage and flood defenses.
  • Contributing towards education.
  • Contributing to Children’s social care.
  • Developing public health.
  • Use in Planning and Development Management.
  • To encourage Tourism, maintaining parks and sports centers.
  • Providing Streetscene Services which includes rubbish and waste collection and disposal, recycling, grounds maintenance, and street cleansing services.
  • Providing Transport services
  • Carrying out Highway and property maintenance
  • Dealing with street lighting and cleaning, and road maintenance
  • Towards Benefit payment
  • Servicing as Business Support including legal, democratic, finance, human resources, procurement, and income collection services.
  • Dedicated to Police and crime commissioner
  • Given towards Fire and rescue authority
  • For monitoring environmental health and trading standards
  • For administration and record-keeping, such as marriages, deaths and birth, and local elections.

On what the money is spent

The money from council tax is spent on the following aspects:

  • Places
  • People
  • Resources
  • Capital charges
  • Passenger transport levy

Council tax for Roads

The services provided by councils include roads maintenance. The local councils use the budget provided to them for local projects such as resurfacing work, building new roads and new road layouts, new car parks, etc.

However, with all the important services that the councils provide using the council tax funds, such as care for children and adults, the maximum amount of council tax funding goes to these services, while very little is left for minor though important services such as fixing roads or maintaining parks and libraries.

A survey on how the council tax money is spent depicted that about 10% of the council tax money is spent upon highways and public transport combinedly.

Most of the local councils on their website mention the bifurcation of council tax received by their residents.

  • The Rochdale council mentions that the council tax paid by its residents goes towards providing a wide range of services to them, one of which is the maintenance of roads.
  • The Barking and Dagenham Borough council mentions that the council tax you pay to your council is your contribution to the many services provided by your council, which includes roads. The 1.99% increase in council tax for the financial year 2021-22 even contains budgeting for providing highway repair services.
  • The Oxfordshire County council’s general council tax is used for all county council services one of which is highway maintenance. The Oxfordshire council 8% of its council tax earnings on highways and transport.
  • The Buckinghamshire council’s website mentions that the council has predicted spending, £135m on strategic infrastructure such as highway projects, £62.4m on the council’s strategic highway maintenance program, £8.3m on footways and £17.4m on plane and patch, for the current year.
  • The Cardiff council mentions its council tax to be included in the maintenance of roads and bridges, traffic management, and road safety.
  • The East riding council has fixed £43.7m of council tax for highway and property maintenance and £5.7m  for transportation.
  • The Trafford council’s webpage has detailed information on road safety, highways and pavements, and various schemes applicable to them.

Conclusion 

This blog answered the question “Does council tax pay for roads?” It covered all the various sources of funding for road tax, the details regarding road and vehicle tax. Along with all this, the blog covered the basics of council tax and enumerated the other areas and services that council tax pays for.

FAQs

Does council tax pay for roads UK?

Yes, council tax pays for roads in the UK. the local councils allot a portion of funds gained from council tax for road and highway development and maintenance.

What does the council tax pay for?

Council tax pays for the services offered by the local councils, such as housing benefits, developing transport, maintaining roads and highways, child and adult precept, waste management, police precept, planning and development, leisure activities, etc.

Who pays for road upkeep?

The budget for roads maintenance is allocated by the central government, since the transport sector is developed by the Mayor of London, and roads are managed by Transport for London.

Is road tax spent on roads?

No, it is not the road tax that pays for roads. There is no such thing as road tax. It is actually vehicle tax that is charged on vehicles for their emission. The maintenance and management of roads are done by the general tax and central budget.

What is Council Tax based on?

Council tax is based upon the value of your property, which determines which Band your property is in, the number of adults staying at your property, the circumstances of people, and the income of the person responsible to pay the council tax.

Citations

 

https://www.local.gov.uk/sites/default/files/documents/A4%20STATIC%20IMAGE_04_1.pdf
https://www.moneyhelper.org.uk/en/homes/buying-a-home/how-to-save-money-on-your-council-tax-bill
https://www.allcarleasing.co.uk/blog/what-does-road-tax-pay-for/
https://www.lbbd.gov.uk/sites/default/files/attachments/LBBD8900_CTax_Mailout_A4_8pp_FEB21_Digital.pdf

http://www.rochdale.gov.uk/council-tax-benefits-and-money/council-tax/Pages/where-council-tax-goes.aspx

https://www.lbbd.gov.uk/what-your-council-tax-pays-for
https://www.oxfordshire.gov.uk/council/about-your-council/council-tax-and-finance/council-funding-and-spending
https://www.buckinghamshire.gov.uk/council-tax/how-your-council-tax-spent/
https://www.gov.uk/council-tax
https://www.cardiff.gov.uk/ENG/resident/Council-tax/what-does-council-tax-pay-for/Pages/default.aspx
https://www.trafford.gov.uk/residents/transport-and-streets/roads-highways-and-pavements/Highways-capital-programme.aspx
https://www.eastriding.gov.uk/housing/council-tax/what-it-pays-for/
https://www.essex.gov.uk/spending-and-council-tax
https://www.essex.gov.uk/spending-and-council-tax/what-council-tax-pays-for
https://www.gov.uk/government/publications/joint-service-housing-advice-office-leaflet-index/understanding-council-tax
https://www.gov.uk/government/organisations/highways-england

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.