There has been plenty of coverage concerning the so-called ‘death of diesel’ and, whilst this may yet be some way off, it is clear that the trend of using taxation to shape markets and influence buyer behaviour is likely to continue.
If the Chancellor does opt for a tax rise for diesels he could be running a political risk by unduly penalising drivers who have bought or leased their vehicles based on sound advice at the time. A cross the board taxation would also be unfair, as modern diesels are so much cleaner than their predecessors. With this in mind, any taxes levied should be aimed at older, more polluting models. This would also be consistent with previous strategies designed to encourage the take up of newer, cleaner vehicles.
Running any size of fleet can be quite a complicated business and there has certainly been a fair degree of legislative and fiscal policy changes over the years. More recently, a new Vehicle Excise Duty system has come into force and there are also changes to Optional Remuneration Arrangements to take into account.
With Clean Air Zones being promised around the country, as well as uncertainty over road charging and emission based taxation levels, there is a need for some much-needed clarity from the Chancellor. Of course, this will come as no surprise to Mr Hammond and we should see announcements around Company Car Tax for 2021 onwards and rates of Fuel Duty for next year.