Chancellor of the exchequer Philip Hammond used his first ever Spring Statement to say the government will “help the great British white van driver go green”.

Mr Hammond explained he would do this by holding a consultation on reduced Vehicle Excise Duty (VED) rates for vans with the lowest emissions.

However, this wasn’t mentioned until the very late stages of his 26-minute speech in the Commons, hinting that the government has more pressing issues to deal with first.

The Spring Statement did clarify annual increases in car and van fuel benefit charges and the van benefit tax charge. In 2018/19, the rates will be:

  • Car fuel benefit charge: £23,400 (2017/18: £22,600)
  • Van benefit-in-kind tax charge: £3,350 (2017/18: £3,230)
  • Van fuel benefit charge: £633 (£610)

From April 6th, company car benefit-in-kind tax for models with carbon dioxide (CO2) emissions above 75g/km will increase by two percentage points, rising to four percentage points for cars with emissions of 0-50g/km and three points for 51-75g/km models.

This means that an employee driving a 120g/km petrol-engined model will see their tax bill increase from 23 per cent of the P11D value in 2017/18 to 25 per cent in 2018/19.

What’s more, the current company car benefit-in-kind tax diesel supplement will increase from three per cent to four per cent at the same. As a result, employees driving diesel cars will see a three percentage point tax hike.

New VED rates for diesel cars will take effect from April 1st too.

This means that the first year rate of VED will be calculated as if cars were in the band above.

For example, a Ford Focus diesel with CO2 emissions of 91-100g/km will be subject to an additional £20 in the first year, while a Volkswagen Golf (CO2 emissions 111-130g/km) will pay an additional £40.

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