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Treasury explores tax changes to encourage white vans to go green

Motors | Published: | Last Updated:

Current legislation sees van drivers pay a flat rate of tax, giving no incentive to choose more efficient alternatives

(PA)

The Treasury has begun a consultation on vehicle tax reforms, aimed at incentivising the use of cleaner commercial vehicles in a bid to cut air pollution.

Aimed at users of Light Commercial Vehicles (LCVs) or the so-called ‘white van man’, the consultation will look into the current system of tax for vans, which sees all vehicles pay a flat rate of £250 per year regardless of emissions.

This is in contrast to passenger cars, which pay a first year’s rate based on CO2 emissions ranging from £0 to £2,070 and a flat rate of £140 each year thereafter. Pure electric cars pay no road tax whatsoever, while hybrid and LPG-equipped cars see a £10 reduction.

The government’s current proposal is to shift vans onto a similar CO2-based system which would see them placed onto a standard rate after their first year.

“Older vans, particularly those which are certified only to the Euro 4 emissions standard and earlier contribute significantly to local air quality problems in a number of urban areas across Britain,” said the consultation report.

“The Government believes this [current] structure is effective for cars, and would propose to replicate this structure for van VED as well, creating a first year rate that incorporates an environmental signal.

“However, there could still be a distinction in the standard rate for vans with particularly low levels of emissions, compared to ones which still emit some CO2.”

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  • 0 (g/km): £0
  • 1 - 50: £10
  • 51 - 75: £25
  • 76 - 90: £105
  • 91 - 100 : £125
  • 101 - 110: £145
  • 111 - 130: £165
  • 131 - 150: £205
  • 151 - 170: £515
  • 171 - 190: £830
  • 191 - 225: £1,240
  • 226 - 255: £1,760
  • Over 255: £2,070
According to DVLA figures, low-emission vans are very much in the minority. Just two per cent of vans registered in 2016-17 emit less than 100g/km of CO2 – with 30.5 per cent falling into the high 191-225g/km band alone.

Environment secretary Michael Gove welcomed the consultation, saying air pollution was a significant threat to public health.

“Businesses have a crucial role in this,” said Gove. “That’s why today we are setting out plans to make low emission vans more affordable and asking businesses how we can help them break down the barriers to the use of lower emission machinery.”

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