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

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.