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VW drivers in UK to escape higher emissions tax, government vows

Volkswagen drivers in Britain whose vehicle was fitted with a device to cheat emissions tests will not have to pay higher taxes to reflect the extra pollution their car causes, the government has pledged.

VW has recalled almost 1.2m diesel cars in the UK and halted the sale of 4,000 vehicles because they possess an illegal defeat device which lowers nitrogen oxide emissions in test conditions but allows high emissions on the open road.

The UK government launched an investigation into the scandal, as have other countries, and said it would look at whether other carmakers were using defeat devices.

However, the transport secretary said UK taxpayers would not incur higher vehicle excise duty on their cars.

Under current rules, cars with higher CO2 emissions pay a higher annual road duty – which can reach £505 a year – while diesel vehicles enjoy significant tax breaks in the belief they are better for the environment.

Once on the road, the VW cars with defeat devices produced nitrogen oxide pollutants at up to 40 times the legal standard. Fixing the vehicles could alter their performance and the level of CO2 emissions from the car.

Patrick McLoughlin, transport secretary, 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.”

The government has written to car manufacturers about the crisis and is to push for an overhaul of emissions testing in Europe.

“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.

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“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.”

Baker Tilly, the accountancy firm, said HMRC had been “cheated” out of revenue by the VW scandal because of the tax breaks that diesel cars enjoy.

Edmund King, president of motoring organisation the AA, however, described the clarification on car tax as “common sense”.

He said: “When customers bought these cars it was in good faith. They bought them based on the details that were available at the time.

“To add to their tax would be grossly unfair. This is a common sense and pragmatic approach and it will put many drivers’ minds at ease.”

The emissions scandal facing VW is deepening, with authorities in France and Italy launching investigations into the embattled German carmaker.

A US congressional oversight panel has also confirmed that VW’s US boss, Michael Horn, will testify next Thursday in what promises to be a key moment for the company.

It also emerged on Friday that Italy’s competition regulator is to investigate whether VW engaged in “improper commercial practices” by promoting its vehicles as meeting emissions standards which it failed to reach without a defeat device.

The inquiry involves Volkswagen, Audi, Seat and Skoda diesel vehicles sold between 2009 and 2015. VW has suspended the sale of affected vehicles in Italy, and has said it will recall more than 650,000 vehicles in the country.

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Meanwhile in France, an official from the prosecutor’s office told Reuters that an inquiry had been opened. The French magazine L’Express said this had been launched at the instigation of Pierre Serne, vice-president of the region Île-de-France responsible for transport.

It also emerged on Friday that other car manufacturers – BMW, Chrysler, General Motors, Land Rover and Mercedes-Benz – are under scrutiny from the US regulator that exposed Volkswagen’s manipulation of emissions tests.

The Environmental Protection Agency (EPA) has broadened its investigation to include at least 28 diesel-powered car models made by those companies,according to the Financial Times.


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