The International Powered Access Federation (IPAF) is to work with members to tackle industry concerns about the planned end to tax relief on red diesel for construction plant machinery in the UK by 2022 and will assist in identifying and responding to possible unintended consequences of the upcoming change.
Last year, IPAF led the powered access industry’s calls for Rishi Sunak, the Chancellor, to further postpone plans he set out in his budget statement of March 2020 to end the tax rebate, taking account of the increasing uncertainty caused by the Covid-19 pandemic at that time. However, the Treasury has signalled its intent to press ahead with plans to phase out the current rebate by the end of the current financial year.
Multiple concerns exist regarding the unintended negative consequences of this, from increasing costs to end-users and potentially stifling investment in greener machines to confusion over the rental of machines between different end-use sectors and incentivising criminal activity, creating a black market in white diesel worth over £100 million a year.
Peter Douglas, CEO & MD of IPAF, says: “We are asking our members to let us know what they feel the knock-on effects of the withdrawal of the current red diesel rebate at the end of the financial year 2021/22 will be, how these will affect their business and in the wider context whether it will aid or hamper the industry’s ongoing shift towards cleaner equipment power-sources, such as hybrid and all-electric machines.
“We know that many of our members are focussed on recovering from the Covid-19 situation and that their primary focus, quite rightly, is on remaining profitable and keeping operations going, ensuring they maintain jobs for their employees and provide cost-effective and safe ways for people to work at height using powered access.
“IPAF expects that many members’ mid to long-term strategies for investing in new machines and cleaner, greener technologies will be affected by the uncertainties of the past year, and we understand that they want to minimise disruption to livelihoods, the prices they charge their customers, and ultimately the safety of all equipment users.
“As an organisation, IPAF needs to identify what the unintended consequences might be of the end to the UK’s red diesel rebate and will try to bring our industry together to find solutions or mitigations before any major problems arise.
“IPAF, and indeed the wider powered access industry worldwide, broadly welcomes and embraces the adoption of cleaner technologies in construction; ours in an industry borne out of innovation that is already widely pivoting towards much greener, low-emissions technology. But there are still major challenges and restrictions in technological capabilities that must be overcome, and we must worth together as an industry to find flexible solutions that work for everyone.”
● Please get in touch to share your views on this issue with IPAF, preferably by email to Richard.Whiting@ipaf.org with your feedback on this planned taxation change. More information about the planned end of the red diesel rebate in the UK can be found in the Government’s white paper, which can be viewed here.