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Government announces review of WLTP and vehicle taxes

Wed 19 December 2018 | Back to news list

The Treasury has announced a review into the impact of the Worldwide Harmonised Light Vehicles Test Procedure (WLTP) on Vehicle Excise Duty and Company Car Tax. The LowCVP will be responding to the review for which the deadline for responses is Sunday 17th February.

The stated aim of the review is to ensure the government strikes the balance between protecting consumers and meeting the UK's climate change commitments. It considers whether vehicle tax changes are required once the Worldwide Harmonised Light Vehicles Test Procedure (WLTP) is fully adopted from April 2020.

This review seeks evidence on the impact of WLTP on reported CO2 emissions, and views on whether changes are therefore required to Vehicle Excise Duty (VED) and Company Car Tax.

VED and company car tax are graduated based on CO2 emissions, although they have different structures and banding. Tax rates were previously based upon reported CO2 emissions achieved through the New European Driving Cycle (NEDC) which has been in place since 1992.

At the Autumn Budget 2017, the Government announced that cars registered from April 2020 will be taxed based on WLTP figures. WLTP is a newly introduced laboratory test for emissions and fuel efficiency, which will help reduce the current gap of around 40% that exists between NEDC results achieved in the laboratory and actual emissions.

The deadline for responses to the Consultation is Sunday 17th February.

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