posted 9 years ago

Jason Dawe on The Latest Stealth CO2 Tax

What's 15p between friends?

It always seems to be a good time for politicians to float new policies, ideas and plans just as the weather gets warmer. With parliamentary summer recess just around the corner and a new Prime Minister limbering up in the wings, now is a good time to tidy up loose ends, introduce some new policies and then push off for the summer hols. Like school on the last day of term, nobody is really listening and everyone is demob happy. But come October we will all suddenly be screaming in disbelief when we find our refuse is now collected every other month, the local post office is a discount shop and we need a biometric passport when we cross the county boundary with a slop bucket.

But until such time we are content to potter around in the garden, make the most of the long days and balmy evenings, and try and grab a few days of holiday. It all seems so far away. “Nothing much will happen,” you lazily muse as you sit by the pool sipping an ice cold drink. Words that have a horrible way of coming back to haunt you.

A story which is beginning to bubble and fits this category appeared this week. Revelations were made of a cunning new stealth tax, once again aimed at the motorist, reportedly being considered by ministers. Apparently there are plans afoot to lower the tax threshold paid by employers to employees who use private cars for work. The figures bandied about were for a planned reduction of 15p from 40p-per-mile to 25p for those using vehicles with CO2 emissions above 185 grams per kilometre. A quick check on the calculator suggests that if you drive 10,000 miles for work you could find you are £1,500 a year worse off.

The AA condemned the proposals, maintaining that the realistic cost of running a car was about 43p a mile. A spokesman said: "We fear that if the untaxable allowance for cars covering 6,000 to 10,000 miles is virtually halved from 40p to 20 or 25p, workers and volunteers driving longer distances, particularly in rural areas, will lose out substantially.”

I wonder if one of the reasons behind this is that apparently not enough of us are really giving consideration to the CO2 emissions our cars produce. A recent MORI poll shows that low CO2 emissions are still less important to buyers than annual running costs. Although sales of smaller superminis and fuel efficient diesel cars have risen, low emissions run a poor second to motoring costs when it comes to the decision making process. When asked if low carbon dioxide or low annual running costs were more important, just 13 per cent of survey respondents said low-CO2.

A spokesperson from Revenue and Customs has insisted that these plans are “mere speculation”, but the backlash has begun. It’s always a good strategy to make proposed legislation seem initially worse, before introducing the changes but with apparent concessions to keep the complainers happy. Always nice to leave plenty of time to manoeuvre and debate, before announcing that you have listened to the public and now plan to reduce it to 30p instead. Makes you seem caring and considerate, especially when you then unveil a proposed “Car buyers information pack” (joke – I hope!)

The full details of the proposal for this tax cut (see what they’ve done there?) are still vague, but, like the road charging petition from a few months back, this story could run and run? but shortly at only 25p a mile.

Happy motoring!!