Chancellor’s Spring Statement offers little clarity on company car taxation

Having previously indicated that new WLTP-based CO2 values will be used for tax purposes from April 2020, the Government’s Spring Statement (13 March 2019) gave no clarity for companies and drivers over future taxation.

The Worldwide harmonised Light vehicle Test Procedure (WLTP) which came into play last September for cars has been subject to a review to see how it may impact on both Vehicle Excise Duty and company car tax, however there was no response to the consultation in the Chancellor’s Spring Statement.

Instead, in papers accompanying the Spring Statement, the Government says that it will issue its response to the review into the impact of the WLTP on Vehicle Excise Duty and company car tax ‘in the coming months’.

“Sadly, we remain in the dark on this issue,” said Giles Bolton, Grosvenor Leasing’s head of corporate finance.

“Companies and drivers have faced such long periods of ambiguity around WLTP that we’d hoped this matter would have been mentioned in the Spring Statement, but we will have to now wait and see what materialises in the coming months.

“It makes it very hard for drivers and companies to reach decisions on vehicles for the next 3 to 4 years, not knowing if a tax increase is on the horizon for the cars they are choosing. However, we will continue to offer transparent and objective advice to our customers based on the information available and we will remain on top of all developments.”

For any advice or assistance on taxation, Grosvenor has a panel of experts who can help. For an informal discussion, please call us on 01536 536 536.