The BVRLA has welcomed the Government’s attempts to support fleet uptake of ultra-low emission vehicles.
In last month’s Autumn Statement, the Chancellor unveiled a number of measures aimed at boosting the emerging market for cars emitting less than 75g/km CO2. This included support for workplace charging and the retention of salary sacrifice tax advantages for ULEVs.
The Chancellor also promised a new, more granulated range of company car tax bandings for ULEVs from April 2020. In that month, the appropriate tax rate for zero emission cars will drop from 16% to 2%. This could cut a basic rate taxpayer’s company car tax bill by around £70 per month, or save a higher rate taxpayer up to £1401.
“It is great to see that the government now has a more comprehensive strategy on ultra-low emission vehicles, which recognises the huge role played by the fleet sector,” said BVRLA Chief Executive, Gerry Keaney.
“The company car tax regime is the single most powerful tool policymakers can use to drive behaviour change, but it is not being used effectively.
“By signposting these tax incentives but delaying them until 2020, the government could encourage thousands of pragmatic, cost-conscious drivers to defer the move to low emission motoring.
“Our cities are facing an air quality crisis and the government is in danger of missing its longer-term CO2 targets. The Mayor of London and the Environmental Audit Committee have both called for greater government action on road transport emissions now, not in 2020,” added Keaney.
As well as calling for the introduction of new company car tax bandings to be brought forward, the BVRLA is also urging HMRC to make a decision on what Advisory Fuel Rates (AFRs) will apply when electricity is used as a fuel type.
Elsewhere, the association has welcomed the clear ‘green light’ given to salary sacrifice car schemes in the Autumn Statement. The government recognised the huge role these schemes play in providing employees with clean, safe and cost-effective transport and provided and decided to exempt them from new tax rules coming into effect in April 2017.
The exemption applies to ULEVs emitting less than 75g/km of CO2 and BVRLA members offering salary sacrifice schemes have embraced the new regime.
“Salary sacrifice schemes are an extremely valuable employee benefit and the certainty provided by the Autumn Statement means this won’t change,” said Keaney.
“ULEVs will continue to receive the full savings and advantages of these and other car benefit schemes and we expect the demand for this kind of car to surge thanks to the government support provided via the Plug-in-Car Grant and tax incentives for workplace charging.”
The government has said that it will protect any existing employer-provided car arrangements made before April 2017 and that this protection will last until April 2021. The BVRLA’s understanding is that ‘arrangement’ refers to any contract agreed between an employee and employer.
Note to editors
1 Illustration based on a company car tax rate for a Nissan Leaf Acenta 30Kw with a P11d price of £30,225. The monthly Benefit-in-Kind tax cost for a 20% taxpayer would fall from £81 to £10, while for a 40% taxpayer, it would fall from £161 to £20.
About the BVRLA
Established in 1967, the British Vehicle Rental and Leasing Association is the UK trade body for companies engaged in the rental and leasing of cars and commercial vehicles. Its 900+ members operate a combined fleet of around 4.8million cars, vans and trucks. BVRLA members buy nearly half of all new vehicles sold in the UK, supporting around 317,000 jobs and contributing nearly £25bn to the economy each year.
By consulting with government and maintaining industry standards, the BVRLA helps its members deliver safe, sustainable and affordable road transport to millions of consumers and businesses. For more information, visit www.bvrla.co.uk.
For more information, contact:
Toby Poston – Director of Communications & External Relations
tel: 01494 545700
mob: 07979 756533
Jamie Fretwell - Media Relations & Communications Manager
tel: 01494 545710
mob: 07790 271806