The BVRLA has written to HM Treasury ahead of the Spring Budget to outline what the Chancellor must do for the vehicle rental, leasing and fleet sectors to support recovery.
This influential demand-side of the automotive industry, that spends over £30bn a year upgrading fleets, purchases 83% of vehicles made and sold in the UK, supports almost 1/2m jobs and contributes £49bn a year to the UK economy, is calling for long-term tax certainty in the Budget.
BVRLA Chief Executive Gerry Keaney said: “This Budget is an opportunity for the Chancellor to introduce measures that will give the fleet industry the confidence to invest, create jobs, and support economic recovery.”
“We need a long-term perspective on tax to combat uncertainty, support for the hard-hit rental sector, and some creative thinking on tax allowances that can unlock investment in green technology.”
In its pre-Budget submission, the BVRLA urges the Chancellor to take three clear measures:
- Freeze Vehicle Excise Duty until April 2022 – Covid-19 saw the tourism and leisure market fall off a cliff, losing around 40% of the vehicle rental sector’s annual transactions. A freeze in VED would support this hard-hit sector and would help firms’ cashflow and protect jobs.
- Clarify company car tax rates up to 2025-26 – Both leasing firms and their customers need long-term clarity to calculate affordability of a lease contract, which could be 4-years in length. Clarity and certainty around the future Benefit-in-Kind rates for battery electric vehicles is also going to be vital to successfully driving the uptake of zero-emission vehicles.
- Expand green investment tax allowance – The full cost of investing in workplace charging infrastructure is a barrier for many fleets. Although businesses can offset the cost of charge points to reduce their tax liability, they cannot offset the full cost including groundworks, installation, and grid upgrade. This needs to change to incentivise private investment into expanding the UK’s charging infrastructure.
Keaney continues: “2021 will continue to be tough and the Government will need to extend further support to businesses. Fiscal support is crucial and providing clarity, certainty, and creative incentives are vital to that mix. This will enable fleets to take important decisions that will help to make 2021 a year of recovery.”