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

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
Surprise fuel duty freeze fails to dampen driver discontent with Autumn Budget
Parliament

Surprise fuel duty freeze fails to dampen driver discontent with Autumn Budget

Was Labour’s first budget a let-down for motorists? Most of our readers think so
News
5 Nov 2024
Mileage fraud threat highlighted by vehicle check data
EU to crack down on car clocking companies

Mileage fraud threat highlighted by vehicle check data

160,000 used cars will be sold with incorrect mileage this year, new figures show
News
1 Nov 2024
Haul of 30 luxury cars stolen from the UK found in Thailand
Ford Mustang, Porsche Cayman and BMW M4 returned from Thailand

Haul of 30 luxury cars stolen from the UK found in Thailand

Eight year investigation concludes, with no British charges despite arrests
News
1 Nov 2024

Most Popular

New Vauxhall Mokka facelift takes the fight to the Ford Puma with £24k starting price
Vauxhall Mokka facelift - front static

New Vauxhall Mokka facelift takes the fight to the Ford Puma with £24k starting price

Vauxhall’s stylish small SUV has been given an interior makeover, bigger screens and a simplified engine line-up
News
6 Nov 2024
Dacia Spring Cargo is a new city slicker electric van for only £13k
Dacia Spring Cargo - front static

Dacia Spring Cargo is a new city slicker electric van for only £13k

The commercial version of Dacia’s cut-price Spring EV ditches the back seats to increase cargo space
News
5 Nov 2024
New BMW M3 will keep petrol power, but there'll be an EV, too
2028 BMW M3 render (watermarked)

New BMW M3 will keep petrol power, but there'll be an EV, too

Next-generation BMW super-saloon will be available with choice of two powertrains when it goes on sale in 2028
News
7 Nov 2024