After being criticized for the attempt to introduce a company car tax, the Government may push to boost incentives for ultra-low emission vehicles.
Low CO2 vehicles not exempt
In March, George Osborne announced that there would not be exemption for electric cars and hybrids in fleets. In the autumn statement however, Osborne stated that he intended to review this in light of the fact that the government wants to promote green vehicle adoption. This would of course prove to be another U turn, leaving a string of inconsistencies in his budget reforms of late.
With regards to the review of company car tax, his ‘green book’ states that: “The Government will consider the case for providing time-limited incentives through company car tax to encourage the purchase and development of ultra-low emission vehicles, while ensuring that all company cars are subject to a fair level of taxation.”
Julie Jenner, chairman for the ACFO (Association of Car Fleet Operators) commented that the last reform to company tax penalises employers and employees “who have been doing exactly what the government requested of them – choosing low emission cars,” Which incidentally are a considerable investment in themselves. She said that such employees and employers should be punished for taking “on board the Government’s Signals.”
The move would have seen any company vehicles with emissions below 95g/km taxed at 13% from 2015, but this is being scrapped. The review will now focus however on those vehicles producing less than 75g/km in a bid to promote such vehicles.
It seems at any rate, that we’ll have to pay up in some form, the question is, how? Government revenues have dropped significantly as of late and as such many possible revenue-raising measures are being looked at. There may also be plans to increase levies on commercial vehicle insurance companies, but we hope it won’t come to that.
The BVRLA has also emphasized the importance of the leasing industry to keep its 100% tax-free allowance on low emissions vehicles, something which was being threatened in the March budget.