The UK is suffering increased emissions due to confused messaging on diesel and a lack of clarity on tax and benefits-in-kind (BIK) policy for fleets, according to Alphabet chief financial officer Stefan Oswald.
Oswald has called on the UK chancellor Philip Hammond in his Spring Statement, due on 13 March, to make some ‘fresh, bold announcements and to bring clarity to some of the industry’s burning questions’ after speaking to Alphabet’s customers and consultants.
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“The unavoidable reality is that increases in BIK and confused messaging over diesel has resulted in the CO2 output for the total UK vehicle fleet increasing last year,” said Oswald. “At the moment, that trend doesn’t appear to be changing, which is a reversal of nearly 20 years of progress on emissions.”
Oswald suggests:
- Bring the BIK advantages for electric vehicles forward from April 2020. “No one can understand why, when we want to promote new, low emission vehicles that are still in an ‘early adopter’ phase and with the government investing heavily in the charging infrastructure, we are delaying the dramatic BIK drop for EVs (from 16% to 2%) until April 2020,” said Oswald. “That would be a real shot in the arm for EVs and convince fleets to take action now rather than wait until after 2020.”
- Certainty on tax framework. “We used to have government commitment to the certainty of a five-year tax horizon, which is much needed for an industry and customers with three and four-year change cycles. Currently, we don’t know anything of the taxation framework beyond April 2021. More certainty on future arrangements will help fleets make plans and decisions for the future – currently, fleets are planning beyond 2021 ‘in the dark’.”
- Clarity on company car tax in relation to corporate fleets and benefits in kind. “With increasing numbers of organisations and employees considering ‘opting out’, the BIK restraints no longer apply,” said Oswald. “So my final request is for the chancellor and government to realise that we are close to a tipping point – if we’re not there already – on company car tax where the unintended consequences will be year-on-year increases in CO2 output despite technological advances, older, dirtier and less safe vehicles out on the roads, while BIK will potentially have lost its power as a governmental lever to persuade large numbers of UK drivers to ‘do the right thing’.”
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By GlobalData
