New tax rules introduced this week will mean that businesses operating car fleets will have to pay around £50 extra tax per year on many cars with low emissions.
The Finance & Leasing Association (FLA) said the introduction of this tax on top of existing taxes penalises businesses for making green fleet vehicle choices.
It estimates that the tax on a mid-range car, e.g. Vauxhall Astra 5dr 1.3CDTi, which has low emissions of 130g/km, will cost a large company car fleet operator an extra £51 per year in tax for each vehicle in the fleet.
Julian Rose, head of asset finance at the FLA, said: “The Government’s own analysis estimates an increased tax burden across company cars of some £210 million per year by 2012/13. This is not only a tax on high emissions cars, but on investment in all business cars. At a critical time it could put further pressure on Britain’s car industry.”
He added: “The FLA welcomes measures that address environmental concerns, but the objective should be to reduce taxes on more environmentally-friendly cars, so that motorists switch from cars with high emissions. It should not mean an overall increase in taxes for all motorists.”