We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive all cookies on the Business Car website. However, if you would like to, you can change your cookies at any time
The start point for the best source of fleet information |
There's one tax out there that still punishes drivers for picking diesel, so why is the business car community accepting it, asks the Insider
The problem with punitive taxation comes when the punishment no longer fits the crime. I'm talking about the 3% benefit-in-kind diesel penalty.
Initially this was supposed to slow the dash to diesel by reducing the benefit, as the fuel was considered dirty back in 2002. The worry was that all the extra smoking would be bad for our health.
Now, deep into Euro4 emissions regs, why do we still have this archaic penalty foisted on us? Archaic is exactly the right word because companies only buy new, so three years later all our cars have been replaced. Yet, as the last of our Euro3 cars head for the auction halls, the company car tax is now the only tax that still punishes diesel. Private cars are statistically older and more polluting, but the taxes affecting them are now all fuel-neutral. VED and fuel duty both used to have diesel penalties built in, but now don't. The dominant ultra-low sulphur diesels on the forecourts are now taxed the same 50.5p per litre as petrol.
None of the newer CO2-based taxes single out diesel - not those ridiculous resident street-parking charges in loony Lib London boroughs, or Ken's congestion charge, which you'd think might be more sensitive to localised emissions than most (although it remains to be seen which low-emission cars dodge the charge from February).
“When there are so many diesel-purchase pennies rolling into the Treasury, to cling on to this out-of-date penalty is brazen in the extreme, especially when technology has invalidated its reasoning” |
The Insider |
Fuel- and technology-neutral is the buzz-phrase right now, so why doesn't that apply to company diesels? Hybrids will no longer have their own little discounts come April, meaning the Prius will mix with diesels in the new, come-choose-me band for sub-120g/km cars. Except it'll be at 10% while diesel band members such as the Golf Bluemotion TDI stop at 13%. That doesn't sound fuel-neutral to me.
I reckon we will see the 3% slashed for Euro5 diesels eventually, just like they did for the Euro4 cars before the regulations became law. And yes, I think tax discounting is exactly the right thing to do to encourage newer, cleaner technology. But that tax-cut should make it cheaper than the petrol equivalent, not the same.
Come April next year, duty on fuel will be just a few pence shy of £2.50 a gallon. In 1993 that was the price of a gallon! When there are so many diesel-purchase pennies rolling into the Treasury, to cling on to this out-of-date penalty is brazen in the extreme, especially when the reasoning behind it has been rendered obsolete by technological advances.
BusinessCar magazine ©2019
Business Car Magazine © 2020 | Business Car is part of NS Media Group.
