August 20, 2018
The government have already announced plans to reform vehicle excise duty (VED) for vans, with the aim of encouraging the adoption of cleaner vans, however there are now calls for this to be delayed until more affordable low-emission options are available.
Recently the government held a consultation regarding the alteration of the current flat VED rate for new vans, similar to the system which is currently in place for cars, where first year rates are lower for cars which emit less carbon dioxide. The government has stated that under a transformed scheme, the majority of new van purchases would incur less van tax in the first year than is currently the case. The consultation finished in July with any changes expected to be announced at this year’s budget.
The British Vehicle Rental & Leasing Association (BVRLA) have spoken out regarding the plans and have recommended a postponement; whilst they welcome the objective of encouraging the sales of more low-emissions vans, they believe that currently there is a lack of selection of these type of vans on the market and those that are available tend to be far more expensive than Euro 6 diesel vans. The BVRLA hence fears that small businesses in particular will feel the effects financially of the proposed VED van tax changes.
The BVRLA is also concerned that the VED tax reform may see new Euro 6 vans experiencing a higher van tax rate than higher polluting Euro 4 or Euro 5 models, with older vans not covered by the proposed VED alterations. They believe instead that the government should incentivise van manufacturers to produce a more affordable range of greener vans across all weight ranges, with their suggestions including increasing the value of plug-in van grants to essentially make green vans cost the same as diesel counterparts and offering additional research and development grants for new technology.
BVRLA chief executive, Gerry Kearney commented on the government plans:
”BVRLA members are keen to embrace lower emission vehicles and want to play a part in improving the UK’s air quality. The government’s approach will have the unintended consequence of penalising hard-working businesses. By heavily focusing on leveraging taxation the government is missing a trick to incentivise the much-needed production of a greater number of affordable, low emission vans. Van users in the UK currently don’t have much choice across all weight ranges. By allowing older, more polluting vans to continue to be taxed at a lower rate than newer, more efficient diesel vans the government is sending the wrong signal and is failing to reward those making cleaner choices.”
The Federation of Small Businesses (FSB) also commented on the potential negative impact of policy changes on small businesses, with policy chairman Martin McTague commenting:
”Around two-thirds of FSB’s small business members rely on vans for transport and deliveries. Without these vehicles, they cannot provide their vital services throughout the UK, including those operating in busy town centres. Small businesses are keen to play their part in improving air quality, but they continue to face barriers to adopting new, cleaner forms of transport, including the high cost of replacement vehicles and lack of charging infrastructure.”
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