The budget delivered some much-needed clarity on diesel taxation while providing vital extra support for electric and autonomous vehicles, says the British Vehicle Rental and Leasing Association (BVRLA).
On decision to temporarily increase the Company Car Tax Diesel Supplement to 4% for vehicles that don’t meet the Real Driving Emissions Step 2 standard, BVRLA chief executive Gerry Keaney said: “Having previously promised that it was only looking to change the tax treatment for new diesel cars, the Government has gone back on its word by retrospectively raising the company car tax bill of hundreds of thousands of workers.
“People that chose a diesel car as a cost-efficient, low CO2 form of essential business travel are being punished unfairly. Why should drivers at work be treated differently from other taxpayers?
“We are also disappointed that the Government has not given any further clarity on Company Car Tax rates beyond the 2020 tax year. This information is vital as BVRLA members work with their customers in putting drivers into the most affordable, safest low-emission vehicles.”
On the temporary introduction of a temporary increase in first-year vehicle excise duty for new diesel cars (for vehicles that don’t meet the Real Driving Emissions Step 2 standard), Keaney added: “This is a fair, well-signposted tax change that will encourage more drivers and fleets to look at alternative hybrid and petrol-powered new cars.
“Fleets across the UK will be breathing a sigh of relief that the Chancellor has not increased the tax burden on commercial vehicle operators. This is the fair thing to do as they have no realistic alternative to using a diesel van or truck.
“We welcome the Government’s review into the fuel duty treatment of alternative fuels and the announcement of a freeze of the fuel duty escalator for LPG.”
On the confirmation that NEDC-compatible CO2 figures would continue to be used in calculating Company Car Tax until April 2020, Keaney said: “We welcome this final confirmation that a new WLTP-based CO2 Company Car Tax regime will be introduced in 2020.
“Although we had pushed for the vehicle leasing industry to be given an extra year to prepare for these changes, we look forward to working with the Government in developing a tax revenue neutral approach for 2021 and beyond.”
On the announcement of further support for Electric Vehicles, Keaney concluded: “Although manufacturers are bringing an ever-expanding range of AFV’s to market, the infrastructure is not in place yet to make it a mainstream choice.
“We welcome the Government’s commitment to investing in charging infrastructure and continued incentives, which will facilitate the wider uptake and use of electric vehicles.
“The fleet industry also welcomes the clarity provided on the company car fuel benefit exemption for people charging at work.”