In last year’s Autumn Budget, Chancellor Phillip Hammond announced that all diesel cars registered after 1st April 2018 would be pushed up a tax band. With the new tax rules now in force, industry experts have remarked that they’re unfair and aimed at the wrong vehicles.
The new rules exclusively effect new cars and see both private car owners and company car owners paying out more for their diesel cars. Under the new rulings, new diesel cars that don’t comply with the new Euro 6d standard of air quality have been pushed up a tax band, whilst company car owners face a benefit-in-kind supplement tax increase to 4%.
According to the Low Carbon Vehicle Partnership (a Government-back organisation) there are currently no vehicles on sale that comply to the new Euro 6d standard, owing to the fact that it doesn’t become law until 2020 and vehicle manufacturers need time to develop new technologies. Instead, the cleanest new diesel cars on sale today comply with Europe’s current required level – Euro 6c.
Talking of the above, the UK’s Society of Motor Manufacturers and Traders boss Mike Hawes told Autocar:
"It's unrealistic to think that we can fast-track the introduction of the next generation of clean diesel technology which takes years to develop, in just four months. This budget will also do nothing to remove the oldest, most polluting vehicles from our roads in the coming years.”
Hawes acknowledges that the Government has not enforced this new ruling on older diesel vehicles as many were bought in good faith under previous Government initiatives that promoted buying diesel, but goes on to mention that we should encourage the latest technology rather than penalise people for purchasing it.
The tax increase comes alongside the new Real Driving Emissions (RDE) test that sees car emissions tested in more realistic circumstances. One of the key differences between the new Real Driving Emissions test and the previous test is that the RDE test measures pollution levels of the car on the road and not in a lab.
These results are used to validate the results of the lab-based Worldwide Harmonised Light Vehicle Test Procedure (WLTP) that is run alongside it. The new test is much more stringent and doesn’t become a regulation until 2020 – the new tax rules, however, require models to conform to this standard two years early.
The UK Government has calculated that the new tax rule will raise around £70million in 2018 and £35million in 2019 and they will subsequently use the money to help fund other air quality improving projects that they are currently working on.