Van VED reform should be postponed to help small businesses

Plans to reform the VAN VED regime should be postponed until there is a greater supply of affordable low emission vans on the market to avoid hurting small businesses, according to the British Vehicle Rental and Leasing Association (BVRLA) and the Federation of Small Businesses (FSB).

Responding to a consultation on reforming Van VED, the BVRLA welcomed the government’s aim but highlighted the lack of options currently on the market. The BVRLA also pointed out that those vehicles that are available are usually far more expensive than their Euro VI diesel equivalents. As vans are almost entirely an essential business tool this would penalise van users for carrying out their necessary everyday work. This would hit small businesses hardest as many operate on tight margins and cannot easily absorb such additional costs.

The BVRLA also raised concerns about another unfortunate side effect which could see operators of cleaner, new Euro VI diesel vans charged a higher tax rate than Euro V or Euro IV models. Older vehicles will not be included in the proposed reforms and instead would continue to be charged at the current, lower rate.

The BVRLA has suggested the government should instead incentivise manufacturers to produce a more affordable range of greener vans across all vehicle weight ranges. The BVRLA also believes the government can help by increasing the value of plug-in van grants to deliver price parity with diesel vans and providing more R&D grants to encourage manufacturers to bring these products to the market.

Commenting on the consultation, BVRLA Chief Executive Gerry Keaney said: “BVRLA members are keen to embrace lower emission vehicles and want to play a part in improving the UK’s air quality.

“The Government’s approach will have the unintended consequence of penalising hard-working businesses. By heavily focusing on leveraging taxation the Government is missing a trick to incentivise the much-needed production of a greater number of affordable, low emission vans. Van users in the UK currently don’t have much choice across all weight ranges.

“By allowing older, more polluting vans to continue to be taxed at a lower rate than newer, more efficient diesel vans the Government is sending the wrong signal and is failing to reward those making cleaner choices.”