Taxation Position Paper

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

Calling for:

A fair taxation regime that gives foresight to fleets and their customers by:

1. Not penalising company car drivers and businesses

  • Engage with HM Treasury and parliamentarians to secure clarity on future BiK and VED rates

  • Use BVRLA research and communications to demonstrate the impact that a rising BiK and VED burden will have on drivers and members’ businesses

  • Collaborate with members and other stakeholders to strengthen campaign messages ahead of the 2021 Comprehensive Spending Review and fiscal events

2. Facilitating the upgrade towards zero emission vehicles and new mobility models 

  • Engage with government officials to ensure the tax system incentivises the transition for all segments of fleet and is flexible enough to respond to changes in the market
  • Provide thought leadership for how the taxation system can be reformed to create the right incentives for decarbonisation and behaviour change 

3. Setting out a fiscal roadmap that supports the deployment of increasingly connected, autonomous, shared and electric vehicles

  • Collaborate with relevant stakeholders to influence HM Treasury to set out the future of motoring taxes 

  • Producer research and thought leadership  that helps inform long term motor taxation policy

  • Engage with Government to ensure fleets are at the centre of long-term motor tax policy thinking 

Taxation key messages

o Fleets are leading the charge to decarbonise road transport if current incentives continue and our ‘Plug-in Pledge’ will see the sector registering 400,000 battery electric vehicles (BEVs) per year by 2025, making it responsible for 80% of new battery electric car and van sales.
o Industry needs clarity and Government needs to set out their short, medium and long term motor taxation strategies so the industry has the clarity needed to decarbonise. 
o HM Treasury must work with other departments to align transport policy, industrial strategy and taxation measures to ensure our sector can continue to drive the zero emission vehicle transition.
o It is too early to roll back support for zero emission vehicles.
o Government need to ensure their motoring taxation policies work for new low-carbon mobility options. The leasing and rental sectors must be central to this thinking on transport taxation. 

Taxation key asks

o The Government must work with industry to review VED and make it fair for fleet.
o The Plug-in Grant and low BiK rates for BEVs must be maintained for as long as they are needed for the transition. 
o Foresight of BiK rates must be set out for at least five years. 
o Government should zero the VAT on the hire of BEVs and PHEVs through rental or car clubs.
o Leasing and rental must not be excluded from super deductions and first year allowances for ZEVs.
o Reform the AER to work for fleets and their customers.
o Reform BiK so that it does not inhibit new mobility options and behaviour change.
o Work with industry to develop a road map for the future of motoring taxes and any move to road pricing.