Fleet News

Government plans shake-up for taxation of private use of vans

THE Government plans to push ahead with reforms to van taxation and is about to start a major consultation.

Currently, van drivers who use the vehicle privately have a standard taxable benefit of £500 a year but in this year's Budget, Chancellor of the Exchequer Gordon Brown confirmed the Government's intention to change the system to reflect the environmental impact of vehicles.

This could mean a move to an emissions-based tax system, similar to the one for company cars. In a statement, the Government said: 'Following initial discussions with industry and other key stakeholders, the Government will now consult formally on the tax treatment of company vans, with a view to deciding how best to simplify the legislation for shared vans and to encourage use of more environmentally-friendly vans.'

A consultation document will be available shortly but opponents have previously warned that any move away from the basic van tax system could create chaos for fleet decision-makers and leasing companies.

One criticism is that van drivers generally have little or no choice regarding the type of vehicle they are given so could potentially end up with a high-emission vehicle and a hefty tax bill. As van technology is behind that of cars, many van emissions tend to be higher anyway.

Opponents to an emission-based tax system also warn the move could create an administrative nightmare. While such a system could promote the use of LPG vehicles, many fleets believe the fuel has a limited appeal as the volume and weight of the tank required can reduce a vehicle's load capacity.

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