The fleet industry is urging the Government to take a fair and balanced approach in its review into whether revisions to Company Car Tax and Vehicle Excise Duty are required as a result of the shift to WLTP.

The industry is calling for a fair approach to the treatment of CCT and VED

Announced in October’s Budget and open until 17 February 2019, the review follows the introduction of the WLTP fuel and emissions testing cycle for all new car registrations from 1 September 2018, which has been introduced to generate more realistic fuel and CO2 figures. Initial evidence provided by manufacturers suggests that more than 50% of cars will see an increase from NEDC to WLTP of between 10% and 20%, bringing major cost increases for drivers through BiK and for fleets through VED and National Insurance contributions (NICs).

Already, the Government has said it will retain the current CCT and VED structures as it believes these are fundamentally right. But the fleet industry is urging the Government to do the right thing with its future CCT and VED policies amid fears that a wrong course of action will be taken, or even no action at all. The introduction of WLTP has already brought disruption to new car sales and fleet cycles, not helped by a continued lack of insight on future fleet taxation. Although fleets had been expecting the Government to provide clarity on the changes in the Budget, HM Treasury merely announced the review.

Fleet guru Professor Colin Tourick commented: “The bottom line is that the Government hasn’t covered itself in glory here. It is patently unfair that fleets and fleet drivers should have been left in this limbo, and the Government really does need to ensure that it publishes the new rules this spring, rather than push this once again into the long grass. And the key thing we should demand of them is fairness. The new rules just have to be fair.”

His views are backed up by Jon Lawes, managing director of Hitachi Capital Vehicle Solutions, who said: “The Government needs to consider how it can provide a smoother changeover process for the car industry with initiatives such as this, so that they can be implemented quickly and without any undue negative impact on the industry at large.

“When WLTP was introduced our car quotation system, which normally holds about 7,000 cars, dropped down to 1,500. While this figure is climbing back up, we still haven’t reached the previous levels – it’s clear that manufacturers are still getting up to speed.”

ACFO is also calling for a fair and clearly signposted approach. Deputy chairman Caroline Sandall said: “We urge government to consider the negative impact that both the increases and uncertainty around future taxation is already having on the industry.

“Fleet represents a great opportunity for government to further the aims under its ‘Road to Zero Strategy’ yet we are seeing employees ‘vote with their feet’ and opt out of company cars – yet, we know that when they do so, the majority choose older, higher CO2-emitting vehicles.

“We need a simple and fair system that gives drivers a degree of longevity – ideally a four-year benefit-in-kind tax table – but also some protection from the increases we have seen as part of the migration to WLTP.

“Drivers should be treated fairly and appropriately incentivised to take lower emission vehicles which then cycle into the used car market, supporting government initiatives to reduce harmful emissions.”

ACFO has also urged fleets to have their say in the WLTP review before it closes on Sunday 17 February. For more details of the review and to submit responses, click here.