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Clean, green, eco-friendly vans to save on tax? Chancellor’s Spring Statement announces new consultation

  • Plan to boost eco van sales with tax incentive
  • Announced by chancellor in 2018 Spring Statement
  • Aim to improve air quality in towns and cities

Written by CJ Hubbard Published: 14 March 2018 Updated: 14 March 2018

UK chancellor Philip Hammond has announced a new consultation on van tax, which could see buyers of new, less polluting models pay less in Vehicle Excise Duty (VED).

The news came in the 2018 Spring Statement, though no further information about the timing of the consultation has been given at this stage.

And it is only a consultation – so there are no guarantees that any proposed reduction will actually pass into law.

Why would the government want to reduce tax on eco-friendly vans?

The government is extremely keen to promote less polluting vehicles – especially in towns and cities where air quality concerns are growing.

This plan would incentivise van owners and drivers to switch to newer models that produce lower emissions, thus improving air quality. A similar consultation has already been made for taxis.

What sort of vans would be available with lower tax?

This is unclear – chancellor Hammond could mean all Euro 6 models, or he may be hoping to promote sales of electric and hybrid vans.

There are a number of electric vans already on sale (we have reviews of most of them – see below), and these produce zero emissions when driving, so instantly improve urban air quality. However, they also have only limited range and lengthy charging times compared to conventional diesel and petrol models.

There are as yet no hybrid vans available to the general public, but Ford is testing a plug-in hybrid electric vehicle (PHEV) version of the Transit Custom right now, and the London Electric Vehicle Company (LEVC) has a similar design on the way, based on the latest TX eCity taxi.

These PHEVs combine the ability to travel longer distances with pure electric motoring for zero emissions, but are potentially costly, complex – and not quite as green.

Ford Transit Custom PHEV – all the latest news, info and pictures

New LEVC electric range-extender van for towns and cities

How do we know that tax on eco-friendly vans will actually get lower?

This is a good point – we don’t.

Hammond has said: ‘Following our successful intervention to incentivise green taxis, we’ll be helping the Great British white van driver go green with a consultation on reduced VED rates for the cleanest vans.’ 

However, that’s not quite the same as saying the chancellor isn’t planning to actually increase tax for more polluting vans, thus still making cleaner ones cheaper.

After all, vans are already taxed at a more financially attractive flat rate than cars. We will have to wait and see.

VED rates for vans (and pickups) have now been confirmed for the 2018/2019 financial year, and there is a slight rise in all of the existing flat-rate amounts. For full details, see the Parkers Vans guide to van tax by clicking here.

List of current electric vans

Citroen Berlingo Electric

Iveco Daily Electric

Nissan e-NV200

Peugeot Partner Electric

Renault Kangoo ZE

Renault Master ZE (coming in late 2018)

Also read:

Van and pickup tax – everything you need to know

2017 Budget: no major changes in van and pickup tax

The Parkers Vans guide to electric vans

Tax savings for cleanest, greenest vans - Ford Transit Custom PHEV