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Transport for London's proposed changes to the congestion charge could come into effect from early next year, which leaves little time for business to adjust, says Rupert Saunders
You may or may not like the present Labour Government. You are entitled to your own views about Gordon Brown and his 10-year term as Chancellor. You probably have strong views about the CO2-based business car tax system.
But I suspect most business car managers and drivers would agree on one significant improvement in Treasury policy that has become apparent in recent years - whenever possible, they always give us at least three years warning about tax rate or threshold changes that might affect our industry.
Of course, some tax changes must remain shrouded in secrecy. But, by and large, this Government has recognised that businesses buy or lease their vehicles on a three-year cycle. So, any business car tax planning has to be done with a view to a three-year horizon and, if policy change is to be truly effective, it might as well take that into account.
This came across very strongly recently when I was researching reaction to the HMRC consultation document on proposed changes to Approved Mileage Payments (AMAPs). Typical was this comment from Richard Schooling, commercial director at Alphabet.
He told me: "If I were an employer dependent on employees using their own cars, my first concern would be for a sensible transition period to prepare for the new system. Pushing change through too quickly will hurt a lot of workers who can't afford to change their cars immediately."
“Nobody has told TfL or Mayor Ken Livingstone that radically changing the system at such short notice is unlikely to have any effect; except for upsetting voters and damaging business.” |
Rupert Saunders |
Just a few days later Transport for London released its consultation document suggesting significant changes to the congestion charge. The consultation period doesn't close until 19 October but the first changes could come into effect on 4 February next year.
I will leave it to others to argue the merits, or otherwise, of the various charging plans being considered. But, plainly, nobody has told TfL or Mayor Ken Livingstone that radically changing the system at such short notice is unlikely to have any effect; except for upsetting voters and damaging business.
Business car managers, drivers and the dealers who supply them simply will not be able to react in any kind of meaningful way. Adrian Rushmore of EurotaxGlass's has already warned there could be a "profound impact" on residual values of some vehicles while dealers around the capital will be forced to change the profile of their used stock.
I know many auto retailers around London who are already struggling to stay in business. The majority of franchised dealers inside the M25 only survive because they are either owned by a car manufacturer or receive commercial support from them. As a result, Londoners are having to travel further, increasing pollution and congestion, simply to get their vehicles serviced.
Surely even the Mayor can see that a transitional period make sense. What chance he is actually listening?
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