Home Climate Change Company Car Subsidies - The Cretins Are Out In Force Again

Company Car Subsidies – The Cretins Are Out In Force Again

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We’re told that the vast evil corporates gain huge tax subsidies from buying cars. This is warming the planet and will lead to Flipper being broiled in the fumes of the last ice floe. This must all be stopped!

We are told this by dribbling cretins.

UK and European governments give companies subsidies worth €32bn (£29bn) a year towards buying cars, the vast majority of which are polluting diesel and petrol models, new analysis has found.

The UK subsidies were worth €5.7bn (£5.2bn) to company car owners in 2019, according to the study by analysts Dataforce on behalf of Transport & Environment, a campaign group. Germany, the EU’s largest car market, provided subsidies worth €12bn.

Major European car markets, including the UK, Germany and France, give generous allowances to businesses buying cars, both for vehicle fleets and as employee benefits. These include allowing the deduction of VAT and depreciation write-offs – benefits not available to individual car buyers.

The thing being depreciation and VAT recovery are not subsidies of any type. They’re essential parts of a rational tax system.

VAT is “value added tax”. The entire point of the system being that it takes some portion of the value added at each stage of the production process, this then summing up to the total VAT rate on that final sale to the end consumer. This is the very structure of the entire idea. Therefore if a business is charging VAT to that end consumer it must be able to claim back the VAT it pays on supplies to itself, used to produce the goods for sale to that end consumer. Yes, this would include the vans that carry the stuff around, the cars that take salesmen on their rounds and so on.

If you start to deny that VAT deduction then what you’ve now got is a not-VAT system.

Depreciation is equally a necessary part of a rational tax system. The van driving stuff around is a cost to the business. Profits are taxed when we deduct costs from revenues. The van is a cost to be deducted from revenues before profits are taxed.

Sure, the tax laws say you can’t deduct it all in year one, you only get depreciation allowances which spread that out over the years. But all that’s happening is that costs are being deducted from revenues before profits are taxed.

Shrug.

About which our cretins say:

When buying a car, a company can apply for VAT deductions and
depreciation write-offs, while an individual cannot. The deductions
and write-offs for company cars in 8 largest markets alone
cost European taxpayers €32 billion every year,

Cretin’s too polite a word for these people, isn’t it?

Sadly, it does in fact get worse. Those UK subsidies? From their own – and I repeat, this is their own – source analysis:

Notably based on our calculations, both the Netherlands and the UK are the only
countries where fleet vehicles generate more tax than a private vehicle.

Even by their own calculations, their wholly incorrect ones, UK business vehicles appear to have a negative subsidy.

We get to upgrade “cretin” to “moron” don’t we? Or what’s some truly awful insult? Owen Jones? For we’d predict that he’s going to use this sometime soon, wouldn’t we?

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7 COMMENTS

  1. In the UK, you can only claim back VAT on a car if it is used 100% business only.

    Since the vast majority of company cars are given to employees with private use allowed, the vast majority of UK cars are purchased without VAT being reclaimed.

    “When buying a car, a company can apply for VAT deductions and depreciation write-offs, while an individual cannot.”

    Same goes for just about everything a company buys, from laptops to pencils to heating the office to sandwiches bought for a lunchtime meeting.

    Whoever is writing this stuff is a moron of the highest order.

  2. When they’re writing rhetoric rather than journalism (which is most of the time), all of the other inconvenient facts are ignored. Well, not ignored, as such; they are, simply, outright ignorant of them.

    Jasper Jolly (he’s name tells us all we need to know) has been spoon-fed some pablum, which he has swallowed-down uncritically and regurgitated into print without having the faintest idea what any of it means.

  3. Don’t most/many companies lease vehicles in which case VAT is deductible on the lease rental portion and their is no depreciation to write off. Companies like leading because it does not tie up capital, and avoids tax issues when company/private use are considered.

    And employees are taxed on private use, fuel for private use and employer/employee NIC charged on private use vehicle and fuel. Or it used to be so.

    Of course the start point here is to refute the nonsense about ‘polluting’ by which it is meant CO2 of course and the Climatism religion.

    For real pollution, they should try horses as the primary means of locomotion and see what the streets look and smell like, their shoes and clothes too.

  4. The obvious insult is “Diane Abbott.” The language is as bad as the analysis: it is logically impossible that “both the Netherlands and the UK are the only countries…” – just delete “both.”

  5. If you reword that as:
    “When buying supplies and equipment, a company can apply for VAT deductions and depreciation write-offs, while an individual cannot.”

    it even more clearly shows the deep-mine level of stupidity.

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in British English
expunct (ɪkˈspʌŋkt)
VERB (transitive)
1. to delete or erase; blot out; obliterate
2. to wipe out or destroy

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