The British Vehicle Renting & Leasing Association (BVRLA) has written to the Treasury in an effort to counter the fleet sector ‘tax attack’ launched in March’s Budget.
The government intends to change company car tax rules, making it much harder to claim tax relief on lease and rental vehicles. Documents obtained by the BVRLA under the Freedom of Information Act show that the Government hopes to earn an extra £2bn from company car tax between 2013 and 2017 and make nearly one million fewer business cars eligible for 100% first-year or standard tax relief during that period.
In addition to the letter expressing concern, the BVRLA has assembled a ‘Business Car Taxation Taskforce’ to develop lobbying strategies and technical arguments against what it sees as discrimination against the sector.
BVRLA chief executive John Lewis said: “Tax incentives for reducing fleet emissions have worked too well and the government is worried about falling revenues.
“But these measures are ill-advised, unfair and over-aggressive. There is almost total consensus across the road transport and automotive industry that the government is in danger of erecting a massive roadblock across the road to low-carbon motoring.”
The taskforce plans to commission an independent report that will use member statistics and other data to challenge what it sees as unfair elements of the government’s capital allowances regime.
In particular it wants to reverse the decision to remove the 100% first-year capital allowances available on low-emission vehicles from leased cars, which would also impact rental firms.
The group will also seek to challenge the continuing application of the Lease Rental Restriction, which prevents companies deducting the full cost of leasing or renting certain cars from their taxable profits.
The BVRLA has already started trying to persuade the government to introduce a more gradual increase in company car tax for cars emitting between 0 and 75g/km CO2 after April 2015. At the moment, these cars will go from either being taxed at a zero rate or 5% of their P11D price, to a 13% rate. The BVRLA claims that this is already making company drivers hold back on choosing an ultra-low emission car while they re-evaluate the cost.
“We understand the need for austerity measures, but this assault on essential road users will result in more harm to the environment. It is even more misguided than the Pasty Tax,” said Lewis.