The Worldwide Harmonised Light Vehicle Test Procedure (WLTP) is the replacement laboratory testing cycle for the previous New European Driving Cycle (NEDC) test. All new-to-market vehicles have been subjected to tests under WLTP from September 2017, all new vehicles sold undergoing test using WLTP from September 2018. The objectives of the WLTP are to determine the fuel consumption and CO2 emissions of vehicle. The test also aims to reduce the difference between CO2 values determined on the test and the actual values consumed.
The effect of the WLPT emission tests, particularly in the area of taxation is different, depending on the party involved. It is worth noting that most emission levels are increasing and the purchase price increases with the road tax increase on first year. The increased tax burden will be borne by both employers and employees.
For company cars, drivers pay income tax on the Benefit in Kind value, which is calculated using the vehicles CO2 emission. For business owners and fleet managers, it is extremely important to know that the emissions and fuel consumption values are likely to change for the vehicles the business operates. Consequently, a failure to monitor fuel consumption and emissions will not only affect air quality but could negatively affect the cost of running the business.
Under the new test the published CO2 may change and it can affect the amount of income tax paid on the BIK. The introduction of the relatively new environmental constraints will continue to drive up the price of vehicles, with the tax burden also contributing to the increase in the total cost of ownership (TCO).
Regardless of the WLPT emission tests and the impact of the change in taxation on companies and individuals, the system is designed to satisfy the needs of everyone in the long run.
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Company Name: Genus Leasing
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