With just over a month to go until the Chancellor of the Exchequer delivers the 2016 Budget, the BVRLA has called on HM Treasury to treat company car drivers more fairly.
In its submission the association has urged the government to carry out a wholesale review of the current system of company car taxation, recognising the benefits these vehicles bring in terms of reduced emissions and tax revenues.
“Since George Osborne became Chancellor in 2010, company car drivers have been hit by a series of tax increases that are both unfair and unsignposted,” said BVRLA Chief Executive, Gerry Keaney. “It is no coincidence that we have seen 30,000 fewer employees taking a car as part of their work package during this period.”
The BVRLA believes that more and more company drivers are instead choosing to use their own privately owned vehicles, which on average tend to be older, less safe and more polluting.
“By encouraging employees to give up their company cars, the government risks hundreds of thousands of motorists opting for older, privately-owned vehicles that are not built to the same safety and emissions standards,” Keaney added. "In 2015, BVRLA members purchased nearly 50% of all new vehicles sold in the UK, and the average BVRLA member’s leased car emitted just 117.8g/km CO2.”
Going forward, the association calculates that the effect of the 2% increase in Company Car Tax from 2017-18 and the delay in removing the 3% diesel supplement will cost the average company car driver an additional £626.94 in 2017-18, and an extra £882.26 in 2018-19 compared to what they paid in 2013-14.
Mr Keaney added: “The Chancellor must use the Budget to reverse some of the damaging decisions he has made recently, including the delayed abolition of the 3% diesel supplement. These measures are at odds with the government’s stated aims to increase the take-up of ultra-low emission vehicles and improve air quality in the UK.”
The key recommendations in the BVRLA’s Budget submission are:
- Abolish the 3% diesel supplement on benefit in kind (BIK) tax bands for Euro 6 cars from 2016
- Reform BIK bandings, offering a greater incentive for users of ultra-low emission vehicles (ULEVs)
- Make leased vehicles eligible for First Year Capital Allowances
- Introduce a new tax category for electric vehicles that takes their range into account
- Provide more in-life incentives for ULEV drivers
- Safeguard the benefits of company salary sacrifice schemes
- Provide incentives for the fitment of Autonomous Emergency Braking technology
The 2016 Budget will be delivered on Wednesday 16 March.