Skip advert
Advertisement

Calls for car dealerships to reopen as closures costs Treasury £61 million a day

Every day dealers remain closed costs the Treasury £20 million in lost tax revenue, and £41 million in furlough payments

New car dealerships must to be allowed to reopen “as a matter of urgency”, according to industry bosses, who highlight that the Treasury is losing £61 million every day they remain closed.

VAT, Vehicle Excise Duty (VED) and other taxes on private car sales generate £5.4 billion of tax revenue for the taxman every year. The Society of Motor Manufacturers and Traders (SMMT) estimates 23 per cent of this (£1.24 billion) will have been lost by the end of May as a result of the UK’s coronavirus lockdown.

Each additional day new car dealerships remain closed sees the Treasury lose £20 million in taxes while payouts to the car industry’s 590,000 furloughed retail workers are seeing the Treasury spend £41 million a day.

Advertisement - Article continues below

Classed as non-essential retailers, the earliest date on which the UK’s 4,900-strong network of new car dealerships might be allowed to reopen is 1 June. The SMMT argues that car showrooms are one of the easiest types of retailer in which to maintain social distancing, and that the industry is ready to put the proper measures in place.

The UK automotive sector has already lost £8 billion as a result of lockdown, with new-car registrations down 97.3 per cent in April. Production lines are now starting back up again, though, and the SMMT claims there is pent-up customer demand that can be fulfilled.

Mike Hawes, chief executive of the SMMT, said: “Government measures to support the critical automotive industry during the crisis have provided an essential lifeline, and the sector is now ready to return to work to help the UK rebuild. Car showrooms, just like garden centres, are spacious and can accommodate social distancing easily, making them some of the UK’s safest retail premises.

“Allowing dealers to get back to business will help stimulate consumer confidence and unlock recovery of the wider industry, boosting tax revenue and reducing the burden on Government spending. Unlike many other retail sectors, car sales act as the engine for manufacturing and reopening showrooms is an easy and relatively safe next step to help get the economy restarted. With every day of closure another day of lost income for the industry and Treasury, we see no reason for delay.”

Do you think car dealerships should reopen? Let us know your thoughts in the comments section below...

Skip advert
Advertisement
Skip advert
Advertisement

Recommended

Dieselgate is back! Thousands of cars could be recalled as scandal returns
Emissions tests questioned

Dieselgate is back! Thousands of cars could be recalled as scandal returns

The DfT is currently investigating as many as 47 models across several brands that are suspected to use diesel defeat devices
News
14 Nov 2024
Car finance scandal firms given more time to process complaints by FCA
Finance contract, car key and calculator on desk

Car finance scandal firms given more time to process complaints by FCA

As much as £16 billion could be up for grabs for car finance customers affected by discretionary commission arrangements
News
14 Nov 2024
MOT failure rate is worse for vans than cars
MOT

MOT failure rate is worse for vans than cars

More than a third of light commercials failed their first MoT last year, new figures show
News
12 Nov 2024
Paris mayor says ‘non’ to through traffic with plans to fine drivers
Renault Zoe being driven in Paris

Paris mayor says ‘non’ to through traffic with plans to fine drivers

Drivers entering Paris city centre will have to prove residency or a valid destination to avoid a fine
News
5 Nov 2024

Most Popular

New cars that plummet in value can make brilliant used buys
Opinion - Vauxhall Corsa-e

New cars that plummet in value can make brilliant used buys

Editor Paul Barker takes a closer look at our 2024 Used Car Awards
Opinion
20 Nov 2024
Best used cars to buy 2024
Best used cars 2024

Best used cars to buy 2024

From city cars to large SUVs, here’s our annual pick of the star performers that’ll save you thousands when you buy them used instead of new
Best cars & vans
22 Nov 2024
Jaguar concept car teased further in new image
2024 Jaguar badge teaser image

Jaguar concept car teased further in new image

The all-electric concept promises to have bold styling and showcases polarising new logo
News
22 Nov 2024