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EXCLUSIVE Conservative party vows to clean up company car tax
Date: 20 April 2010 | Author: Rachel Burgess
The Conservatives have declared that they would look to ditch the current company car tax system if they come into power.
Shadow secretary of state for transport Theresa Villiers told BusinessCar a Tory government would introduce a "simpler and more efficient" company car tax system if it wins the election on 6 May.
It would "also seek to ensure our approach to tax in this area complements our commitment to tackling climate change and reducing emissions from transport".
Villiers added that the massive increase in the complexity of the tax system under Gordon Brown has added significant costs for business.
The Tories did not elaborate on the plans but early industry reactions suggest introducing a new system may be more trouble than it's worth.
ACFO chair Julie Jenner said: "Anecdotal evidence would suggest that people driving company cars are not unhappy with the current system and have become familiar with the methodology.
"The system was introduced in 2002 with the overall aim of reducing CO2 emissions across the UK fleet parc and in the main this has largely been achieved."
She added: "The choice of lower-emitting cars has increased greatly over the past couple of years and looks set to continue with the manufacturers' ongoing commitment to invest in technology to produce cars with ever-lower CO2 figures."
Business finance expert Colin Tourick echoed Jenner: "Everyone wants a simpler and more efficient tax system but the current one has proved highly effective in reducing emissions from transport.
"It is pretty well established now and people understand how it works. And it has been very effective in encouraging manufacturers to produce low-CO2 vehicles."
He concluded: "There is always a cost of making a change. One of the original principles of taxation was that the tax system should be fairly stable so that people could plan their affairs in the knowledge of the tax consequences. There's a lot to be said for leaving the current system alone."
Jenner added: "Any party looking to make significant changes to the current system must bear in mind the notice period desired by employers and employees alike and consider any potential impact across the industry as a whole.
"I'm unsure at this stage how things could be made much simpler and would question whether people really want a complete overhaul of the system we currently have."
