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Chancellor to consult on VED tax cuts for low-emission vans

Today’s Spring Statement has seen the Chancellor announce plans to consult over possible cuts to Vehicle Excise Duty (VED) to support uptake of low-emission vans.

Electric Van
The Chancellor is to open a consultation in the coming months on possible VED tax changes for the cleanest vans.

During his 26-minute speech, Philip Hammond said: “Following our successful intervention to incentivise green taxis, we’ll help the Great British White Van driver go green with a consultation on reduced VED rates for the cleanest vans.”

The pared-back Spring Statement also saw the Chancellor outline that the economy has grown for five consecutive years, exceeding expectations in 2017, with public finances also improving.

Reinforcing that the Spring Statement was held to give a long-term heads-up on the economy and progress since the last Budget, rather than outlining major tax or spending changes, a Treasury spokesperson confirmed that a consultation on VED changes for the cleanest vans would open in the coming months.

The announcement was greeted by Claire Evans, head of fleet consultancy at Zenith, who said the move should accelerate a trend towards cleaner diesel LCVs that is already being driven by the introduction of ULEZs throughout the country, including the London scheme now due in 2019.

She added: “LCV fleets are already considering the need for cleaner vehicles, and we can expect increased demand for Euro 6 vans. Under ULEZ rules any diesel vehicle other than a Euro 6 will attract an additional fee for driving into the centre of the capital. Other cities are considering their own plans, which may or may not include LCVs. Any further tax incentives that would support the move to cleaner vans are welcome.”

Matthew Walters, head of consultancy and customer data services at LeasePlan UK, also greeted the news: “As a founding member of the EV100 initiative, LeasePlan is committed to low emissions. We strongly believe that vans should be part of this conversation as much as cars.

“However, it should be noted that the Government has already launched several consultations in this area – including one on electric vans – but is yet to announce the outcomes of them. If the Chancellor is to help us deliver on What’s next, then he needs to start confirming some of his policies.”

And James court, head of policy and external affairs at the Renewable Energy Association, called for more action, explaining: “The consultation on Vehicle Excise Duty for the cleanest vans should be extended to see how the tax system can better incentivise electric car adoption, which in turn improves the case for domestic EV manufacturing. Specifically, Benefit in Kind rates for electric cars should be revised.”

Despite calls from a number of fleet industry organisations including the BVRLA, the Spring Statement did not bring any clarity on company car tax rates beyond 2020 and an announcement is now expected in the Autumn Budget.

LeasePlan’s Matthew Walters added: “Many fleets and employees are now entering into 48-month leases that will stretch into those years, so they need clarity as soon as possible. The Chancellor must not fail to publish these rates in his Autumn Budget – if not before.”

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Written by Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day.

Natalie edits all the Fleet World websites and newsletters, and loves to hear about any latest industry news.

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