The Editor’s View

SINCE April 2002 company car benefit-in-kind tax has been based on a vehicle’s list price and its official carbon dioxide emission figure. Over the years, despite a gradual tightening of tax bands, the Government’s tax take from company cars has reduced along with the number of company car drivers. Simultaneously, motor manufacturers have been producing ever lower emission cars to help meet European emission targets. For years, the Digest has highlighted that the drive to lower emissions and the Government’s desire to raise cash from company cars were on a collision course. Now, it seems as a result of measures announced in the spring Budget the Government has also realised that it needs to react to diminishing returns. Two weeks ago (Digest: July 12) the influential Government-appointed Committee on Climate Change weighed into the debate and this week the BVRLA has said that it is fighting back against the Government’s ‘tax attack’ – one for environmental reasons and the other for financial reasons. Ministers have to achieve a balance and they have yet to do that.

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