The Government has launched a consultation looking at the impact the new WLTP testing regime will have on company car drivers when it adopted for tax purposes from 2020.
Although new vehicles have to be tested to WLTP standards now, the taxation change is occurring in April 2020 in order for there to be a smooth transition from one system to another.
Initial evidence provided by manufacturers suggests that over 50% of cars will see an increase from NEDC to WLTP of between 10% and 20%, the Treasury said, warning this may result in company car drivers and fleet operators paying more tax post-2020 than at present for identical models.
“Through this review, the government is aiming to strike the balance between protecting consumers from increased transport costs and ensuring we meet our climate change and air quality commitments by providing clear incentives for zero and ultra-low emission vehicles,” the Treasury said in its consultation document.
Should any changes be required, the Government said these would be introduced in the Finance Bill for 2019-20 with draft legislation being published in order for a consultation to be launched.
However, this is unlikely to result in major changes and it doesn’t look as though the Government is about to cave into sustained pressure from the fleet industry to introduce the 2% BIK rates for ULEZs early or axe the 4% BIK supplement currently applied to new diesel vehicles.
“The Government believes that the fundamental structure of VED and company car tax is appropriate, including the diesel supplement and timeframe for introduction of future company car tax rates,” it said.
The Government is seeking evidence from fleets and interested parties in four areas; people are being invited to respond to the following questions:
- The Government is interested in gathering further data on the impact of WLTP on reported CO2 emissions for conventionally fuelled cars. What evidence can you provide on the differences between NEDC and WLTP reported figures for similar models of cars?
- What further evidence can you provide on the impact of WLTP on reported CO2 emissions and zero emission mileage for ULEVs?
- How should the Government balance the factors when considering whether to introduce changes to VED and company car tax on introduction of WLTP?
- Do you agree that, if the Government makes changes to the vehicle tax system, the adjustment should be simple? If not, why?
Responses need to be submitted by 17 February 2019 to the following email address: RHMTETTAnswers@hmtreasury.gov.uk.