Fleet News

CAP claims CO2 tax doomed to fail

PLANS to radically change company car tax to a system based on a vehicle's carbon dioxide emissions may fail to create a cleaner Britain despite Government assertions of 'green intentions'. The warning came this week from CAP Motor Research which claimed time was running out to develop 'a sensible policy' with the consultation deadline on the company car tax reform proposals due to expire on May 31.

'While the existing system of company car taxation is due to be replaced in just three years Government proposals show little sign of achieving Chancellor of the Exchequer Gordon Brown's stated aims of 'greening up' company car drivers' claimed the Leeds-based independent research analyst for the UK and European automotive industry. 'Time is now critical as the consultation period with experts from inside and outside the industry is due to end next month - with no sign yet of a coherent new policy.'

CAP takes issue with the planned reforms on two major principles - the lack of any mileage criteria and using carbon dioxide emissions as the basis for the reforms due to come into effect on April 6, 2002. Economic Secretary to the Treasury Patricia Hewitt confirmed: 'We wish to remove the perverse incentive in the existing system to drive unnecessary business miles and encourage managers to 'green' company car fleets instead.'

However, CAP economist Ramesh Notra said: 'The latest thinking from the Government yet again fails to address the issue of car use and once again concentrates on car ownership.' He claims basing company car tax on a vehicle's list price and carbon dioxide emissions will lead to 'extreme discrepancies' with two commuters with identical company cars - one who drives to the station and travels to work by rail paying the same tax as a colleague opting to drive all the way.

'You cannot have a 'green' policy which takes no account of miles driven. It is not the act of car ownership which concerns most environmentalists but the use of those cars where there may well be no need for it.'

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee