Spring Budget: Diesel tax regime on cards
A ‘warning shot’ has been fired across the bows of diesel drivers, with the Government planning to explore changes in the way such vehicles are taxed.
The Budget report states that a detailed draft plan will be announced in the Spring concerning improving the UK’s air quality. Allied to this, the report states that “the Government will continue to explore the appropriate tax treatment for diesel vehicles, and will engage with stakeholders ahead of making any tax changes at Autumn Budget 2017”.
This follows a statement during Prime Minister’s Questions before the Budget, in which Theresa May said: “We are looking at the measures that we need to introduce to improve air quality. There have been improvements in recent years but we do need to go further and that is what they Government is looking at across most departments, with the Department for Environment, Food and Rural Affairs paying most attention to that as that’s within their remit.
“We will be bringing forward proposals on air quality in due course.”
The RAC labelled the news ‘a warning shot’ and warned that a new tax regime could be introduced by the end of 2017.
RAC chief engineer David Bizley said: “The chancellor has fired a warning shot to diesel drivers, with the suggestion in the Budget document that a new tax regime covering diesel drivers could be introduced before the end of the year.
“This uncertainty is bound to be of concern to private and business motorists alike, who will be wanting urgent clarity on just what the Government plans to do. The RAC will take a lead in representing motorists when the consultation goes live.”
Sue Robinson, director of the National Franchised Dealers’ Association, urged a ‘co-ordinated approach. She added: “Promoting the uptake of the latest low emission vehicles will bring substantial gains in air quality, but we urge the Government to have a co-ordinated approach with car dealers and manufacturers regarding this issue. We are looking forward to engaging with the Government ahead of making any tax changes at Autumn Budget 2017.”
“Fleets will get the chance to have their say on diesel taxation in the coming months, ahead of what could be big changes in the Autumn statement,” added Paul Hollick, managing director of The Miles Consultancy and chair of the Institute of Car Fleet Management.
“One clue from the red book is that the Treasury expects revenues from fuel duty to rise by £2bn to £30bn a year by 2021.”
For more information on the Budget, click here.