COMPANY car and van drivers and SMEs worried by the tax implications of using Volkswagen Group vehicles with cheating emissions software have been reassured by the UK government that no back tax will be claimed.
The government has announced today that UK taxpayers will not incur higher Vehicle Excise Duty or benefit in kind (BIK) tax if their existing vehicles – cars or commercial vehicles – are found to be fitted with the VAG ‘defeat device’ revealed to have been used in tests for VW emissions.
As the car benefit charge is calculated on the basis of the figures shown on the approval certificates, the tax position for benefit-in-kind purposes remains unchanged.
The HMRC today pledged that regardless of the outcome of Volkswagen’s solution to the scandal, their vehicles will not be rebanded for BIK or VED and consequently their monthly outlay will remain unchanged.
A spokesman said: “Company car tax is based on the CO2 emission figures for the particular type of car shown on either the UK approval certificate or the EU approval certificate.
“As the car benefit charge is calculated on the basis of the figures shown on the approval certificates, the tax position for benefit-in-kind purposes remains unchanged.” He added that the same applied to commercial vehicles which might share powertrains caught up in the issue.
Following VW’s admission of using this software in diesel cars, there is an ongoing UK government investigation which began last week into the extent of this practice.
The government also announced today the next phase of this investigation, which will look at whether the illegal software used by VW is being used elsewhere.
There is no evidence of this but the Department for Transport (DfT) wrote to manufacturers last week to seek further clarity and this next phase will include laboratory and real world testing by the Vehicle Certification Agency (VCA).
Transport Secretary Patrick McLoughlin said: “Our priority is to protect the public and give them full confidence in diesel tests. The government expects VW to support owners of these vehicles already purchased in the UK and we are playing our part by ensuring no one will end up with higher tax costs as a result of this scandal.
“We are also starting our testing programme to get to the bottom of what the situation is for VW cars in the UK and understand the wider implications for other car types to give all consumers certainty.
“I have been pressing for action at an EU-level to improve emissions tests and will continue to do so. I have also called for a Europe-wide investigation into the use of ‘defeat devices’, in parallel to the work we are doing in the UK.”
In addition to writing to manufacturers, the DfT has also urged EU-level action to improve public confidence in testing.
The DfT will work closely with the VCA and the Driver and Vehicle Standards Agency (DVSA) to carry out the programme of tests. Neither cars, nor the testing facilities will be provided by the vehicle industry themselves.
The next phase of the programme will involve initially re-testing diesel cars that VW group has confirmed contain ‘defeat device’ software of Euro 5 category, approved by the VCA, in both a laboratory and real-world setting. These measurements will be used as a benchmark for further testing, with the final programme to be developed.
The government is liaising with other EU countries’ approval authorities who are currently conducting similar investigations. This coordinated approach will improve consistency and enable testing of the widest range of vehicles across Europe.
People who are concerned their vehicle is affected can seek advice from VW here
