The Editor’s View

THE Digest (March 29) was forthright in its view that Chancellor George Osborne’s Budget 2012 decision to axe the company car benefit-in-kind tax incentives relating to electric and ultra-low emission vehicles was bizarre. That sector of the market needs all the help it can get to encourage sales and removing the tax incentives would kill its potential virtually before it had taken off. Now support for a tax U-turn – along with one on the decision to end 100% first year capital allowances on leased low emission business cars – has come from the influential Government-appointed Committee on Climate Change. The Government is anxious to encourage cuts in carbon emissions and, in relation to vehicles, it needs to use fiscal levers to encourage uptake. The Committee also argues in its annual report that ministers may need to consider further differentiation in VED, increased VED and higher fuel duty if progress in reducing car emissions is to be sustained. If the Government is serious about carbon reduction then joined up thinking is needed along with long-term financial support.


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