The Treasury has launched a new consultation proposing to reform Vehicle Excise Duty (VED) for new vans. It is currently charged at a flat rate regardless of the vehicle’s emissions.
The consultation proposes the introduction of an ‘environmentally focused’ first-year rate for ultra-low emission vans, after which all vans would be subject to a standard rate, as is already the case for cars.
The proposal is to calculate the rate based on CO2, although the consultation asks if other criteria should also be considered.
Commenting on the consultation announcement, BVRLA Chief Executive Gerry Keaney said: “We welcome the fact that the Government is looking at this area as we believe that the tax regime is a powerful way of incentivising businesses and individuals to choose low emission vehicles.
“This approach is not ideal because it penalises van drivers or their employers for using what is an essential business tool. Some jobs require larger vans with larger engines and larger CO2 emissions. We do not want a VED regime that encourages people to use vans with a smaller engine and load capacity, which they then either overload or make extra journeys with.
“We would recommend that the Government uses the tax regime to incentivise people based on air quality performance, so that people are rewarded for operating a Euro VI van and penalised for driving an older, pre-Euro V van.”