Hire cars escape ‘pollution tax’ hike

Friday 16 March 2018

Hire car company owners will continue to pay a lower rate of ‘pollution tax’ on their vehicles this year - costing the States £160k - after complaining that a hike was brought in after they had already ordered new fleets and travel brochures.

The Treasury Minister, Senator Alan Maclean, has this week approved moves to stop hire car companies from having to pay a higher rate of Vehicle Excise Duty (VED), which was approved in the 2018 Budget last November in a bid to raise an extra £2.2million.

Proposed by the Constable of Grouville, John Le Maistre, and approved by States Members, the eco-conscious hike saw the duty calculated on the level of carbon dioxide (CO2) emissions or engine size increase by 5%.

They also backed a change to make more vehicles come under the charge. It meant that, starting in 2018, the minimum emission rate for a vehicle to pay the tax decreased from 100g of carbon dioxide per kilometre to just 50g.

Pictured: The tax changes were suggested by the Constable of Grouville in the 2018 Budget debate.

But in a report accompanying his signed decision to exempt hire cars, the Treasury Minister explains that rental company owners expressed “concerns regarding the fact that hire car fleets were ordered and travel brochures issued in advance” of the tax change.

Senator Maclean has now given a relief to such companies, which will apply from 1 January to 31 December this year. After that, they will have to pay the same level of VED as all others. 

The exemption will result in a loss of around £160,000 in income for the States this year.

While the news will be welcomed by rental company owners, dealerships may be less satisfied, after some already complained that the tax increase was negatively impacting business.

Tony Roberts, owner of Nelson Street Vans for two decades, previously told Express that the tax hike on polluting vehicles lost him several sales just nine days into the new year, when the higher duty came into effect. 

Pictured: Nelson Street Vans, whose business was reported to have been affected in the wake of the VED increase.

He said that this had led to customers “keeping unroadworthy, high-polluting vehicles on our roads”, which was both bad for business and was the reverse effect of what the levy had intended to do.

“We have had three vehicles cancelled in the first week of trading in 2018, and it’s only going to continue. God knows what the rest of the year will be like.”