Posted On : 22nd Nov, 2017
The government is on a mission to drive employees out of company cars.
The one percentage point increase in the diesel company car tax supplement further adds to already announced tax increases in the financial years up to and including 2020/21.
What’s more, if the introduction of a company car benefit-in-kind tax system linked to new Worldwide harmonised Light vehicles Test Procedure (WLTP) emissions data does not result in a wholesale restructure of band thresholds tax bills will increase significantly.
The result will be that employers and employees abandon company cars as a benefit that is too expensive.
Instead employers and employees will turn to cash and PCH alternatives and that raises all the well-established issues around the management of ‘grey fleet’ vehicles – privately-owned cars driven on business.
Particularly over the last five years or so, the government has been driving employees out of the private use of company paid for fuel by raising the tax charge year-on-year. The government now appears to be taking the same action with company car benefit-in-kind tax.
The actions that the government is taking shows that it does not understand that the emissions problem – and therefore the whole air quality problem – is with older vehicles. Cars that meet Euro6 emission standards, which is an increasing number of company cars are the ‘cleanest’ available.
I do not understand the reason why HM Revenue and Customs release company car benefit-in-kind tax tables three years in advance, for the government to change them on a whim. The action the government is taking is outrageous.
The government talks about investing for the future but, in truth, the amount of money it is investing in repairing roads, electric vehicles and the recharging infrastructure and driverless vehicles is miniscule.
If the government truly wants to move transport to a low carbon future then the investment announced in the Budget is simply not enough.
Additionally, the announcement of an additional £45 million in 2017/18 to repairs potholes in England is laughable. The roads are crumbling and such small amounts of money do little to deliver a comprehensive repair programme.