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Tories vow to clean up company car tax
The Conservative party has stated that they would intend to do away with the existing company car tax system if they arrive into power.
Shadow secretary of state for transport Theresa Villiers claimed the Conservatives would offer a “simpler and more efficient” company car tax system if it wins the election.
It would “also seek to ensure our approach to tax in this area complements our commitment to tackling climate change and reducing emissions from transport”.
Villiers also said that the substantial increase in the intricacy of the tax system under Labour has increased costs for business.
The party did not go into much detail on the policy but early industry reactions propose implementing a new system may be more of a nuisance than a success.
ACFO chair Julie Jenner had this to say: “Anecdotal evidence would suggest that people driving company cars are not unhappy with the current system and have become familiar with the methodology.
“The system was introduced in 2002 with the overall aim of reducing CO2 emissions across the UK fleet parc and in the main this has largely been achieved.”
She continued: “The choice of lower-emitting cars has increased greatly over the past couple of years and looks set to continue with the manufacturers’ ongoing commitment to invest in technology to produce cars with ever-lower CO2 figures.”
Business finance expert Colin Tourick agrees: “Everyone wants a simpler and more efficient tax system but the current one has proved highly effective in reducing emissions from transport.
“It is pretty well established now and people understand how it works. And it has been very effective in encouraging manufacturers to produce low-CO2 vehicles.”
He finished by saying: “There is always a cost of making a change. One of the original principles of taxation was that the tax system should be fairly stable so that people could plan their affairs in the knowledge of the tax consequences. There’s a lot to be said for leaving the current system alone.”
Jenner concluded with: “Any party looking to make significant changes to the current system must bear in mind the notice period desired by employers and employees alike and consider any potential impact across the industry as a whole.
“I’m unsure at this stage how things could be made much simpler and would question whether people really want a complete overhaul of the system we currently have.”
