Members of an association with a vested interest in commercial vehicle insurance have this week called on the Government to scrap a tax surcharge they feel is damaging the industry.

The Association of Car Fleet Operators (ACFO) is calling on the government to put an end to the 3% diesel company car benefit-in-kind tax surcharge. ACFO believe the tax is outdated as the benefits from driving a diesel vehicle as opposed to a petrol car have virtually disappeared and that the new breed of diesel vehicles is competitive on CO2 emissions in any case. They are also worried that when the Euro 6 emission compliance standards are introduced in 2014 that diesel cars will in actual fact become more expensive than petrol models due to modification needs.

Julie Jenner, the Chairman of ACFO, is adamant the tax should be scrapped saying: “There are no valid reasons for today’s diesel models to carry a three percent company car benefit-in-kind supplement. It was introduced almost a decade ago for reasons that no longer exist. Personal budgets are being squeezed, and evidence suggests that average company car mileage is reducing. If drivers can save money by selecting a petrol-engined model in comparison with a diesel car they will make that choice. Ultimately, the Government’s decision to retain the three percent supplement may prove to be counter productive and the tax-take will reduce.”

ACFO also called upon Her Majesty’s Revenue and Customs (HMRC) to alter the 3 year notice of benefit in kind taxation to be extended to 5 years as they claim many fleet operators are now extending the replacement cycle of their fleets due to the current financial position.