The fleet industry has reacted with disappointment to Chancellor of the Exchequer Philip Hammond’s Spring Statement, in which clarity on the government’s plans for company car taxation failed to materialise.
Fleets were hoping to hear the government’s response to its recent consultation on whether company car tax and VED should be altered due to the arrival of the WLTP emissions regime, which is set to cause increases in cars’ official CO2 emissions figures and therefore the tax they incur.
However, the chancellor merely announced that a response will be issued ‘in the coming months’.
Paul Hollick, chairman of fleet training organisation ICFM, said: “On behalf of all fleet decision-makers and company car drivers, ICFM is hugely disappointed that the chancellor did not use the Spring Statement to bring clarity to company car BIK tax from April 2020 and beyond.
“Promising to publish details ‘in the coming months’ on what is a fundamental issue for all fleets merely continues the uncertainty that is crippling decision-making.
“It is clear that the chancellor, ministers and HM Treasury have become completely blindsided by Brexit and seem incapable of making decisions on many issues, including future company car BIK tax rates.”
Hollick said that while company car tax may appear to be a relatively small issue, more than one million employees pay it, while fleet car sales are critical for motor manufacturers.
He added: “The fleet industry, indeed the entire motor industry, cannot afford for the government to continue to drag its feet on an issue – WLTP-based taxation – the introduction of which it has known about for years and should have been planning for.”
The BVRLA said that in response to the wait for news, the industry should keep up pressure on policymakers over taxation, despite Brexit continuing to dominate the political agenda.
Chief executive Gerry Keaney said: “Like all UK businesses, our sector is waiting with bated breath on the outcome of Brexit, but we must also continue to remind government of the other key issues that matter greatly to our sector.
“Failure to have clarity on a future tax strategy will cause uncertainty for thousands of fleets and company car drivers, which is damaging to both the economy and the environment.
“In our recent meetings with HM Treasury, Department for Transport, BEIS and Downing Street officials, we have emphasised the importance of getting the tax system right and have made clear what the adverse impact will be on our sector if they fail to address vehicle taxation, particularly relating to WLTP.
“Although it is frustrating that we must continue to wait for further clarity, we will use that time to continue to campaign for a swift, tax-neutral and well-signposted approach, that recognises the vital role that company cars and fleets play in reducing road transport emissions and delivering the government’s Road to Zero.”
