Fleets need a fair tax regime that rewards clean choices

The BVRLA has welcomed the Government’s decision to conduct an urgent review into the impact of WLTP* on Vehicle Excise Duty and company car tax.

The BVRLA has welcomed the Government’s decision to conduct an urgent review into the impact of WLTP* on Vehicle Excise Duty and company car tax.

In today’s Budget it was announced that the review would report back in time for the Chancellor’s 2019 Spring Statement. Commenting on the news, BVRLA Chief Executive Gerry Keaney urged the Government to publish a new set of tax bands as soon as possible:

“It is great to hear that the Treasury is making plans to remedy any potential tax distortion caused by the transition to the new WLTP emissions standard in April 2020.

“It is vital that fleets and company car drivers are able to plan for the future, confident that they are working with more accurate emissions information and a fairer tax regime that rewards those who choose cleaner vehicles. These revised tax bandings can’t come too soon.”

The uncertainty around WLTP has also persuaded the Government to put off any decision to introduce an emissions-based regime for Van VED. In the Budget, it confirmed that this would not happen before April 2021.

“This decision to postpone a CO2 based Van VED regime is great news for fleets,” said Keaney.

“Tax incentives can be a very powerful tool in driving businesses to use cleaner vehicles, but it is no use having these until we have enough low-emission van options on the market. The BVRLA is pleased that the Government has listened to its feedback on this issue and decided to take a pragmatic, business friendly approach to greening the van fleet.”

Finally, the BVRLA was dismayed to hear that the Budget included no reference to an early introduction for the 2% company car tax rate for electric vehicles.

“The Chancellor chose to ignore the overwhelming voice of fleets, motoring groups, business organisations, environmental groups and MPs – all of whom were united in calling for this simple tax measure to support the electric vehicle market,” said Keaney.

“The Government has missed a golden opportunity to incentivise the most important market for electric cars and is in danger of undermining its own Road to Zero strategy. “

The BVRLA’s disappointment was shared by Neil Parish, Chair of the Environment, Food, and Rural Affairs Select Committee, one of dozens of MPs that had supported the association’s call. 

“By not bringing forward the 2% Company Car Tax rate for zero-emitting vehicles by one year the Government has signalled that transitioning to cleaner and greener vehicles is not a priority.

“This is a disappointing decision and will discourage company car drivers from choosing an electric vehicle until April 2020.

Building on the strong cross-party support for this policy, I’ll continue campaigning to change the Government’s mind and will be exploring opportunities to amend the Finance Bill to introduce this.”