Tony Roberts, whose Nelson Street business specialises in selling vans, says that he lost three sales in the first week of 2018 after the cost of Vehicle Emissions Duty on certain vehicles soared at the start of the year.
He pointed out that changes to the duty regime, which were approved by the States last year and introduced at the start of the month, meant that a customer now pays £1,931.58 on a standard Ford Transit van, compared to £766.50 last year.
And he added that the 177 per cent tax hike was due to the VED band thresholds being drastically lowered, meaning that a Transit, which emits 222 grams of carbon dioxide per kilometre, moved up two bands overnight.
Vehicles are placed in VED bands based either on their carbon dioxide emissions as specified by their manufacturer, or, in the absence of these, the size of their engine in cubic centimetres. The one-off duty is applied when vehicles are registered in the Island. Mr Roberts said that all vehicles produced after 2011 provided details of their carbon dioxide emissions.
The decision to introduce the lower band thresholds was made by the States in November’s – while discussing the 2018 Budget – after an amendment lodged by Grouville Constable Johh Le Maistre was approved.
Under his proposals, VED also increased by five per rather than the originally proposed 2.5 per cent uplift, in a move which was intended to discourage Islanders from using highly polluting vehicles.
Mr Roberts said, however, that he thought States Members had ‘not looked properly’ at the amendment, which was lodged two weeks before the budget.
‘They saw the five per cent increase and just thought: “Well, OK we’re saving the planet”. But the increase has been massive and it’s because of the bands,’ he said.
‘In the first week of trading this year we have had customers pull out of deals because they could not afford the extra £1,300 they would have had to pay. For a Ford Transit van, which has a carbon dioxide figure of 222, instead of around £700, it is now almost £2,000 in VED.
‘That particular vehicle might cost £9,000 – the customer would be left paying £11,000. It’s a massive difference and they don’t want to pay it.’
Mr Roberts said that he believed that the duty hikes could in fact be counter-productive in their environmental impact and also risked crippling his business.
‘Two customers who have pulled out have told me that they would now rather keep their old, and high-polluting, vehicles and just get them repaired and back on the road,’ he said.
‘People don’t want to pay the money. And it costs £30,000 to buy an electric van, so an alternative isn’t there.’
He added: ‘It’s going to have a massive effect on my business. It’s a game-changer. Last year we paid roughly £30,000 in VED charges. This year, if we carry on doing exactly the same thing, we will be paying £150,000.’