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Clarity needed on changing vehicle tax

The fleet sector has called for clarity on changes to the tax regime as the government looks to fund improvements to air quality through taxation on diesel vehicles, and a move to plug-in models.

Driver picking up fuel pump

Changes to tax on new diesel vehicles is likely to be announced during the Autumn Budget.

Announced yesterday, the government’s proposal includes establishing funds to enable local authorities with air quality problems to bring them back under legal limits – spending it said would be covered by changes to the tax treatment for new diesel vehicles, as well as adjustment to existing budgets. These are likely to be confirmed during the Autumn Budget.

The BVRLA welcomed news that the plan would be targeted at new, rather than existing vehicles, with chief executive, Gerry Keaney, commenting: “The government wants to focus on new rather than existing diesel vehicles when it comes to raising tax revenues to fund these local air quality initiatives. We will work with policymakers to ensure that any new tax measures are proportionate and reflect the essential role the fuel still plays for many road transport applications.”

However, Mark Cunningham, a manager at accounting, tax and advisory practice, Blick Rothenberg, pointed out that a migration towards ultra-low emission cars would also require changes to the tax regime for these vehicles.

“As the number of electric vehicles in the UK increases we could see further significant changes to capital allowance and the company car tax rates,” he said. “Ultimately we will see ‘Electric Charging Stations’ being run by the current petrol and diesel suppliers; they will need to provide fast charging and that is when the tax regime will change.

“There is little doubt though that the Government will come up with an electric charging tax which will impact upon both businesses and the general public.”

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Alex Grant

Trained on Cardiff University’s renowned Postgraduate Diploma in Motor Magazine Journalism, Alex is an award-winning motoring journalist with ten years’ experience across B2B and consumer titles. A life-long car enthusiast with a fascination for new technology and future drivetrains, he joined Fleet World in April 2011, contributing across the magazine and website portfolio and editing the EV Fleet World Website.