The government has launched two separate consultations forming part of an overall clean air strategy, looking at ways to incentivise the use of cleaner technologies.
The government has launched two separate consultations forming part of an overall clean air strategy, looking at ways to incentivise the use of cleaner technologies. One concerns a new scheme of vehicle excise duty (VED) for vans, while the other examines the use of red diesel in non-road mobile machinery, such as cranes or generators used on construction sites.
HM Treasury is consulting until 20 July 2018 on introducing a new graduated scheme of VED for vans, involving a reduced first-year rate and moving to a standard rate after the first year. This would replace the current flat rate. The document also explores possible changes to the van benefit charge and the van fuel benefit charge based on C02 emissions. At Spring Statement, the government announced its intention to consult on reforming VED for vans, to encourage van drivers to move to cleaner models.
This consultation proposes that the reform should be fiscally neutral. This would involve paying for the cost of lower first-year rates through a small increase in the current standard rate. The main proposals include:
introducing an environmentally based first-year rate; and
moving to a standard rate after the first year, using C02 banding.
The government favours basing a new van VED system on CO2 emissions. For technical reasons, it does not believe that the inclusion of a nitrogen oxide (NOx) element in the reformed system would be appropriate at this stage.
While primarily about van VED, the government also recognises the case for adopting CO2-based structures for benefit-in-kind charges on van benefit and van fuel benefit.
Decisions on the implementation date of any changes will be taken after discussions with the automotive industry about new emissions testing methodologies due to be adopted during 2019 and 2020. See https://bit.ly/2IjtXWK.
HM Treasury and DEFRA are consulting until 24 July 2018 on the use of red diesel by non-road mobile machinery (NRMM). This particular consultation excludes red diesel for agricultural use, by fishing vessels, for home heating and other static generators, and builds on HM Treasury’s previous call for evidence into the use of red diesel launched in March 2017. The aim of the consultation is to gather evidence on the barriers to switching to cleaner technologies; and to gain a better understanding of the quantities of red diesel used across different sectors and the value of the fuel duty rebate to those industries which benefit.
According to government estimates, the reduced rate costs around £2.4bn a year in revenue compared to duty being charged at the main rate. Red diesel accounts for over 15% of total diesel use and the government believes the majority of red diesel is used by NRMM.
Responses to this consultation will inform policy options for Budget 2018 to encourage cleaner alternatives. See https://bit.ly/2IGMyzw.
The government has launched two separate consultations forming part of an overall clean air strategy, looking at ways to incentivise the use of cleaner technologies.
The government has launched two separate consultations forming part of an overall clean air strategy, looking at ways to incentivise the use of cleaner technologies. One concerns a new scheme of vehicle excise duty (VED) for vans, while the other examines the use of red diesel in non-road mobile machinery, such as cranes or generators used on construction sites.
HM Treasury is consulting until 20 July 2018 on introducing a new graduated scheme of VED for vans, involving a reduced first-year rate and moving to a standard rate after the first year. This would replace the current flat rate. The document also explores possible changes to the van benefit charge and the van fuel benefit charge based on C02 emissions. At Spring Statement, the government announced its intention to consult on reforming VED for vans, to encourage van drivers to move to cleaner models.
This consultation proposes that the reform should be fiscally neutral. This would involve paying for the cost of lower first-year rates through a small increase in the current standard rate. The main proposals include:
introducing an environmentally based first-year rate; and
moving to a standard rate after the first year, using C02 banding.
The government favours basing a new van VED system on CO2 emissions. For technical reasons, it does not believe that the inclusion of a nitrogen oxide (NOx) element in the reformed system would be appropriate at this stage.
While primarily about van VED, the government also recognises the case for adopting CO2-based structures for benefit-in-kind charges on van benefit and van fuel benefit.
Decisions on the implementation date of any changes will be taken after discussions with the automotive industry about new emissions testing methodologies due to be adopted during 2019 and 2020. See https://bit.ly/2IjtXWK.
HM Treasury and DEFRA are consulting until 24 July 2018 on the use of red diesel by non-road mobile machinery (NRMM). This particular consultation excludes red diesel for agricultural use, by fishing vessels, for home heating and other static generators, and builds on HM Treasury’s previous call for evidence into the use of red diesel launched in March 2017. The aim of the consultation is to gather evidence on the barriers to switching to cleaner technologies; and to gain a better understanding of the quantities of red diesel used across different sectors and the value of the fuel duty rebate to those industries which benefit.
According to government estimates, the reduced rate costs around £2.4bn a year in revenue compared to duty being charged at the main rate. Red diesel accounts for over 15% of total diesel use and the government believes the majority of red diesel is used by NRMM.
Responses to this consultation will inform policy options for Budget 2018 to encourage cleaner alternatives. See https://bit.ly/2IGMyzw.
