Taxation Position Paper

The BVRLA Position Papers outline the association’s views, objectives and engagement activity relating to key policy areas affecting the industry.

The issue explained:

The government is pursuing an ambitious programme to reduce the nation’s carbon emissions and improve local air quality (such as the road to zero by 2040).

At the same time, it is keen to protect the UK economy during Brexit negotiations and recognises the motor industry as a key pillar of the economy.

Meanwhile, the long-term sustainability of the UK’s vehicle taxation system is under threat.

A simple, fair and well-signposted tax system will be key to achieving these ambitions and tackling these challenges.

As the owners and operators of ver five million of the UK’s cleanest and newest vehicles, the BVRLA is well placed to position itself as a constructive partner in helping the government achieve its carbon reduction and air quality targets, without eroding its tax base.

What we are asking of policymakers

  • To take a joined up approach to ensure that taxation policy supports and does not compromise wider government air quality and business productivity objectives.
  • To work constructively with the vehicle rental and leasing sector to set out a long-term roadmap with a managed transition to a zero-emission environment and a long-term sustainable vehicle taxation regime.
  • To support UK businesses and individuals by providing affordable access to low-emission vehicles.
  • To recognise the sector’s vital role in the UK automotive industry and its potential to support greater uptake in low emission vehicles when formulating tax policy.

Top 5 key messages

  • The Government must develop a clear medium to long term plan to modernise vehicle taxation policy and support a zero-emission environment. The BVRLA has produced a report with support from a high-profile coalition of stakeholders, to demonstrate the need for a fair and sustainable tax system that better reflects the changing way people travel and businesses operate.
  • There is a disconnect between government policy on the environment, industrial strategy and HM Treasury’s tax policy. Policy in these areas need to be more closely aligned to ensure that the tax system drives the right behaviour.
  • The rental and leasing sectors play a vital role as a key purchaser of vehicles, parts and services and remarketer of used cars, vans and trucks. In 2017 the industry spent £5.4bn on 304,000 UK-assembled vehicles and was responsible for 83% of all UK-assembled vehicles sold domestically.
  • The government should reward the use of ultra-low emission vehicles by focusing on demand-side incentives in order to accelerate the adoption of these vehicles. and support the rental and leasing industry
  • The Government should protect fairness in the future tax environment by eliminating any Company Car or Fleet market distortion caused by the transition to the new WLTP emissions

Recent BVRLA activity from Q1-2019

  • Met Treasury to discuss capital allowance and longer-term goals
  • Held WLTP roundtable with Treasury & members
  • Coordinated an industry led response to WLTP – including CBI, NFDA, ACFO, SMMT
  • Responded to WLTP consultation and facilitated 100+ responses from members and key stakeholders
  • Produced a report on road tax map coordinating input from stakeholders such as IFS director Paul Johnson, RAC, BP Chargemaster, Energy UK and Zenith – with foreword from Select Committee Chairs Neil Parish MP and Mary Creagh MP
  • Met SMMT, Client Earth, CBI, Lord Whitty, Baroness Brown, Martyn Day MP, Neil Parish MP and senior DfT officials
  • Wrote to Treasury minister, Mel Stride MP calling for support for businesses to reclaim 60% VAT on lease payments