Following the news about the VW emissions scandal, the UK Government has already launched an enquiry and said it will re-test emissions of cars in the UK. Call me cynical but why would the Government do that? I can think of two reasons:

Road Tax – is based on emissions ratings. Could it be that the annual road fund licence on affected vehicles would now be deemed too low? Could the increase be backdated – after all, it’s not the Government’s fault that the figures were wrong to start with; and what if the car has been sold on by the original owner – who makes good the difference?

Benefit-in-Kind Tax – is based on emissions ratings. The higher the emissions, the higher the tax, and without doubt many will have chosen a VW/Audi/Seat/Skoda with low emissions (and low tax) in mind.

What will be the impact on these drivers and their employers if the Government finds that the official emission ratings on those vehicles must be increased? Certainly more tax going forward but how about the past. My guess is that this would pan out as follows:

• UK Government amend the CO2 emissions ratings going forward
• Historically emissions ratings are reviewed and increased (up to 6 years, maybe more)
• There will be increased Employers’ National Insurance liabilities on car fleet owners;
• There will be a higher income tax charge on the company car drivers affected;
• Disaffected and unhappy employees are not good for any employer – HR will be busy;
• Could there be a requirement for companies to make provision for the additional tax costs.

As for the possibility of affected UK taxpayers pursuing VW for losses individually. I wouldn’t rule it out and wonder if the €6.5bn provision includes that too.

VW company car owners and drivers may want to keep a tab on developments that arise from the Department Of Transport’s enquiry. I know I will be – given that I have a tiny and definitely not cool shareholding VW!