Company car tax and VED changes called for to encourage further ULEV demand
Stronger fiscal incentives, including changes to company
car benefit-in-kind tax and Vehicle Excise Duty, must be implemented by
government to further encourage demand for lower emitting and ultra-low
The Committee on Climate Change in its latest report, ‘Reducing UK emissions - 2018 Progress
Report to Parliament’, said current purchasing trends were undermining new
car and van emissions targets and must be reversed.
Furthermore, the Committee also called on the government
to reconsider its freezing of fuel duty.
Average new car carbon dioxide emissions increased last
year for the first time since records began in 2000 and, said the Committee,
the shift towards the purchase of higher-emitting vehicles, notably SUVs, was
working against the regulations for new cars.
The report said: “The move towards higher-emitting cars
presents a major risk to future carbon budgets and it is important that
incentives to purchase lower emitting vehicles are strengthened to support new
car regulations. The shift might be halted or reversed through revenue-neutral
incentives [including] greater differentiation of Vehicle Excise Duty and
changes in company car tax.
“Policies, including fiscal instruments, must strengthen
incentives to purchase cleaner vehicles and support new car and van emissions
targets. The current move to higher emitting cars is undermining efforts to
improve fleet efficiency and must be addressed.”