The British Vehicle Rental and Leasing Association (BVRLA) has called upon the UK government to halt plans to increase Vehicle Excise Duty (VED) fivefold, arguing that it will damage the car rental industry and harm efforts to combat high emissions.

The planned changes will result in the average duty paid for rental cars to rise from £36 (€41.70) in 2016 to £170 in April 2017, and is thereby predicted to cause the industry’s VED bill to rocket from £11m last year to £55m in 2017. 

Approximately £14m of the costs are projected by the BVRLA to be due to the lack of refund on outstanding tax when the vehicle is sold in the first year, a measure that they called ‘inconsistent’.

BVRLA chief executive Garry Keaney said: “Our members are facing a 400% increase in one of their main tax bills, and the inability to claim a refund on any unused portion of the VED is totally inconsistent with usual UK tax policy.”

The group claims that the measures will lead to a decrease in the number of cars purchased for the rental sector, which currently number 324,000 each year.

The BVRLA warned that this could carry an environmental impact, stating that vehicle rental sector helps the uptake of low emission cars in the UK, and claiming the average rental car was Euro 6 compliant.

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By GlobalData

Keaney continued: “The VED changes will slow the rate at which these cleaner cars are brought on fleet and subsequently sold into the second-had market.”