Chancellor Philip Hammond promised that a government consultation on the impact of the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) would be published ‘in the coming months’ in yesterday’s Spring Statement.
This has sidestepped calls for clarity regarding company, say members of the fleet leasing industry.
Lessors have expressed concern that without guidance on how WLTP will affect company car tax rates, there is a risk of contract holders deciding not to renew, and more people opting out of their company car schemes in favour of a less regulated grey fleet environment.
Ashley Barnett, head of consultancy at Lex Autolease, said: “As we move from New European Driving Cycle (NEDC) values to NEDC-derived and ultimately to the exclusive use of WLTP, vehicles’ fuel consumption and emissions values are effectively increasing, which has tax implications for businesses and individual drivers.
“We look forward to reading the government’s response to the outcomes of the WLTP consultation, and hope that the need to manage the impact of WLTP on Vehicle Excise Duty (VED) and company car tax will be recognised.”
In February the BVRLA warned that failure to support the fleet sector with a fair and consistent tax regime could threaten the UK government’s attempt to decarbonise road transport.
The continued absence of company car tax bands past 2020/21 in government regulation has also been posited as a concern, especially due to the fluctuations of business in kind valuations (BIK) on electric vehicles over the past three financial years.
Barnett said: “The lack of long-term company car tax tables is holding the fleet market back, and there had been hope for an update from the Chancellor today. Before fleet decision makers can build a strategy based around the average 48-month contract, and before employees can commit to what is essentially a four-year investment, they need assurance that the associated costs are not going to increase over its lifetime.
“We already know that orders for diesel vehicles are being delayed in case further tax increases are announced that could make them prohibitively expensive.”