May 29, 2018

New van tax change to encourage ‘white van man to go green’

new Volkswagen Crafter electric

The Government is urging van drivers to ‘go green’ and opt for ultra-low emission vehicles (ULEVs), with the potential end of the £250 flat road van tax rate.

New van tax system

There could soon be a new van road tax system, following an announcement by the treasury that they are studying ways to incentivise van drivers into purchasing (ULEVs). Current van tax rules mean that van drivers pay a flat rate of £250 per year, which as it stands means that there is no incentive for van drivers to choose cleaner low emission vans. Hence as little as 0.4 percent of vans on the UK’s road are classified as ULEVs, those which emit 75 g/km or less of carbon dioxide.

The two month consultation proposes the creation of an environment-based graduated first year rate for new vans in order to encourage the purchase of greener vans, which is already the case for cars. The proposals then state that following the first year of operation, all new vans would then be placed on a standard rate.

Air pollution – A ‘significant threat to public health’

Environment Secretary, Michael Gove has labelled air pollution as a “significant threat to public health”. He also stated that “everyone must play their part in tackling its causes”. Gove also focused on the important role businesses have in tackling air pollution:

”Businesses have a crucial role in this, that’s why today we are setting out plans to make low emission vans more affordable and asking businesses how we can help them break down the barriers to the use of lower emission machinery.”

The UK is one of a number of countries currently under pressure from the European Commission to improve national measures to counter air pollution or face consequences from the top court of Europe, in conjunction with France, Germany, Italy and Spain to name but a few.

What vans would the new van tax change apply to?

A new van tax system would apply for vans weighing 3.5-tonnes or less with carbon dioxide emissions of 75g/km of carbon dioxide or less. The Treasury also stated that it will ”explore a graduated first year rate for vans, as is already in place for cars, also commenting that ”most van purchases would pay less tax in the first year as a result of the change”.

Reduced duty rate for red diesel

The proposal comes alongside calls today to look at whether the red diesel reduced duty rate is holding back the usage of cleaner fuel types by non-road vehicles and machines used on construction sites including generators or cranes. Red diesel accounts for 15 percent of all UK diesel consumption, with a reduced rate of 11.14p per litre in comparison with the standard charge of 57.95p.

Help the ‘white van man go green’

Robert Jenrick, Exchequer Secretary to the Treasury believes the proposals prove how the government could use the van tax system to encourage greener new van purchases:

”We want to help ‘white van man’ go green, we appreciate that buying a new van is a major investment for small businessmen and women and want to help make environmentally friendly choices more affordable.”

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