Yahoo Finance White Van Man in Chancellor's sights as he considers tax on vans
Britain’s army of “white van men” could be in the Treasury’s sights for a tax raid under plans to reduce pollution.
A consultation has been announced on how to encourage the estimated 2.5m van drivers on UK roads to go green.
Chancellor Philip Hammond said as part of plans to improve air quality, the least polluting vans could have their vehicle excise duty (VED) cut.
He added that such a scheme would “follow our successful intervention to incentivise green taxis”.
A tax exemption on electric taxis comes into force next month and is worth about £1,500 a year on the green cabs - which cost more than £40,000 - but produce zero emissions.
The majority of vans are diesel fuelled but escaped a tax raid on diesel cars in the last Budget.
Speaking in November Mr Hammond said higher VED on diesel cars would reduce levels of nitrous oxides pollution they produce and finance a £220m Clean Air Fund.
However, he was clear that van drivers - often described as the backbone of the UK economy - would not be affected.
At November’s Budget the Chancellor said: “We only apply the measures to cars, so before the headline writers start limbering up let me be quite clear: no white van man (or woman) will be hit by these measures.”
Currently most vans on UK roads that meet Euro 5 pollution standards pay £140 a year in VED.
Industry insiders expect the details of the consultation to come in the next fortnight and think the new system could be modelled on car VED, under which the more polluting vehicles pay higher levies.
The prospect of higher taxes on vans could prove politically toxic, as even implied criticism has proved dangerous ground for MPs. Labour's then shadow attorney-general Emily Thornberry was sacked as a front-bencher in 2014 when she tweeted a picture of a white van in the drive of a house with a union flags in the window with the words “image from #Rochester” during by election campaigning.
Zero-emission vehicles are far more expensive than conventional vehicles and even the prospect of a tax break to encourage them could provoke a political backlash.
The issue is compounded by there being very few suitable replacements for vans on offer, and those that are available do not have the range of current vehicles.
The Chancellor also used the Spring Statement to reveal a probe into red diesel in non-agricultural uses and whether it causes inner-city pollution. This fuel - used in stationary plant equipment such as generators - is taxed at a sixth of the rate of normal diesel.
