Almost exactly as predicted by HRUX two years ago, HMRC confirmed last week that the total number of company cars reported in 2019/20 has fallen to 800,000*, which is down 160,000 since 2016.
That’s 160,000 people who’ve moved from a regime where CO2 is tightly controlled to one where they can pretty much drive anything.
The graph below shows the CO2 for company cars since 2010, and it is pretty clear that the tax regime was very effective in driving down emissions for those that stayed with company cars.
So what did the Government achieve by substantially hiking the company car tax over the last 8 years. Was it about the environment? Hardly. EVs have arrived in force through 2020 and 2021 but they were barely a factor back in 2012. Was it about increasing tax revenues? Well it did do that, but the effect was limited and overall the extra revenue is barely a blip compared to (say) fuel duty.
So what do we have, all told? An extra couple hundred thousand private cars (and I’d wager a lot of them petrol SUVs) that will stay on our roads for ten+ more years? And, arguably, a generation of employees and fleet decision makers that have written the company car off, and will need serious convincing to come back on board for electric? Not great is it?
(* “provisional” number)