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 over 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

A fair and well-signposted motoring tax regime that recognises the role that BVRLA members can play in delivering cleaner, cheaper, safer and more reliable transport. The key focus will be to:

  • Secure a fair deal for company car drivers and businesses
  • Accelerate a change in transport behaviour towards zero emission
  • Work with policymakers on the design of a new tax system fit for a zero-emission future

Top 5 key messages

  • BVRLA members buy nearly 50% of new cars, vans and trucks, including around a third of all new plug-in vehicles. The fleet sector is the quickest route to decarbonising road transport.
  • The Government needs to align its environmental and tax policies to drive electric vehicle (EV) uptake. The current VED surcharge of £320 should be removed for EVs, or the £40,000 threshold increased, to ensure our tax system encourages the right behaviour.
  • The Government must develop a clear medium-to-long term plan for ensuring the modernisation of vehicle taxation and supporting a zero-emission environment. It should commission an independent review into modernising motoring tax and the development of a national road-user charging policy.
  • In order to accelerate the adoption of ultra-low emission vehicles the Government should provide longer term incentives that stimulate demand, such as grants, use of bus lanes and free parking.
  • The Government’s recent revision of Company Car Tax (CCT) rates is welcome, after years of persistent tax rises. Company cars are some of the greenest and cleanest vehicles on UK roads and the Government should now commit to a future tax regime that further supports this vital part of the fleet sector.

Recent BVRLA activity from Q4-2019

  • Commissioned Cambridge Econometrics to produce medium-term tax research
  • Submitted recommendations to the Government’s Spending Review
  • Long term taxation steering group formed to guide policy position on issues such as road user charging
  • BVRLA election manifesto includes multiple asks for the next government to support the fleet industry through a fairer, more transparent tax system
  • Met with several environmental groups to seek their support for Budget and Elections asks.
  • Engaged with SNP Leader, Ian Blackford, in Westminster, Shadow Business and Transport teams and Transport Minister of State, George Freeman
  • Met with Treasury Motoring Tax and Automotive spending teams to discuss tax and incentives for EVs