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Budget should close second-engine £126m tax loophole, Dearman CEO urges Chancellor

Dearman, Scott Mac Meekin.

The Chancellor has been urged to use the Budget to close a £126 million tax loophole allowing double-engine trucks to use red diesel.

The loophole benefits an estimated 26,000 cold delivery trucks that have two engines- the main engine propelling the truck, and a second engine keeping the back compartment cold.

While main engines are subject to increasingly tough Euro emission standards, weaker regulation for second engines means they can emit almost thirty times as much dangerous pollution as main engines.

A tax loophole means second engines are also allowed to use Treasury-subsidised diesel on public roads, known as red diesel.

Analysis by clean air experts Dearman shows the amount used by cold delivery trucks is estimated to be worth £126 million.

The UK’s 84,000 cold delivery vehicles- including the 26,000 with two engines- are estimated to cause as much pollution as 3.8 million Euro 6 diesel cars.

Reports have suggested the Chancellor may use next week’s Budget to increase taxes on diesel car drivers.

The Treasury’s subsidising of cheap diesel for highly polluting engines is likely to be seen as unfair by car drivers facing greater taxes to tackle pollution.

In his Spring Budget earlier this year, the Chancellor announced a consultation on red diesel use in urban areas. This has raised the potential of removing the red diesel subsidy for cold delivery trucks.

Dearman’s chief executive Scott Mac Meekin (pictured) said: “Reports that the Chancellor might announce new diesel car taxes in the Budget will not go down well with drivers, especially when they see the Treasury subsidising cheap diesel for highly polluting second engines used in trucks.

“The Budget is an opportunity to make our tax system fairer, to encourage the development of British technology, to reduce pollution and invest money into a health service dealing with the impacts of toxic air.

"The Chancellor should close the £126 million tax loophole and end cheap diesel for polluting delivery trucks.”

Read Dearman's blog on red diesel 

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