Acfo proposes six-point company car tax action plan in response to WLTP consultation
18 February 2019
Author: Sean Keywood
Fleet operator organisation Acfo has put forward a strategy it says the government should adopt to "protect and enhance" demand for company cars.
The six point plan has been sent to HM Treasury in response to its review into the impact of the WLTP emissions regime on company car BIK tax and VED.
WLTP, to be adopted in full next year, is set to bring increases in official car CO2 emissions figures, which form the basis for the tax rates.
According to Acfo, the government should do the following:
- Realign BIK tax bands to smooth the transition to WLTP, or consider a "grandfathering" of cars registered prior to 2020 to account for the rise in CO2 emissions under WLTP testing.
- Implement the 2% BIK tax rate for cars with CO2 emission of 0-50g/km immediately and not wait until 2020/21 as scheduled.
- Provide a continuous four-year advanced view of company car BIK tax thresholds to give employers and drivers certainty over future bills.
- Remove the existing 4% BIK tax supplement on diesel cars that do not meet the Real Driving Emissions 2 standard.
- Confirm an extension of the existing Plug-In Car Grant scheme for at least two years to provide fleets with a period of stability and certainty.
- Consider further incentives, such as congestion charge exemption and free parking in urban areas, in addition to BIK tax, to encourage increased adoption of ultra-low emission vehicles.
Acfo deputy chairman Caroline Sandall said: "The government cannot continue to treat company cars as a 'cash cow'.
"Word from the government has previously been that it sees the transition to a tax system based on WLTP CO2 emission figures as being tax neutral and it must adhere to that.
"Furthermore, if the government is to achieve its ambition to reduce vehicle emissions then it must ensure that the tax regime supports and enhances demand for company cars, the newest and cleanest cars on the roads, and make the changes as Acfo has outlined in its action plan."