The Government has published a draft Finance Bill, which details how it intends to apply recent tax policy announcements.
Several clauses will have a direct impact on the vehicle rental and leasing industry. In particular, Clause 1 will ensure that when a taxable car or van is provided through an optional remuneration arrangement (OpRA), the amount foregone will include costs connected with that vehicle which would be included within the normal benefit in kind rules.
Additionally, the changes will adjust the value of any capital contribution towards a taxable car when that vehicle is only made available for part of the year.
Clause 9 seeks to tighten Corporate Interest Restriction (CIR) rules in the Taxation (International and Other Provisions) Act 2010 (TIOPA), to better align the application of this regime with its original purpose.
Finally, Clause 13 will also be of interest to the sector as it covers leases. Changes proposed within this clause include amending current legislation that relies on lease accounting definitions and making minor amendments to the rules for Long Funding Leases.
The BVRLA understands that members may be frustrated by Clause 1 because this legislation will have an impact on business costs and accounting practices. The association will seek further clarity on the legislation from HMRC and will call for a clear transition plan alongside confirmation that there will be no retrospective application of the regulation.
The BVRLA are keen to hear the views of members ahead of upcoming discussions with HMRC. Please email BVRLA Senior Policy Advisor, Jinmi Maclaulay with any comments by Friday 13th July.