HM Treasury has informed the BVLRA of pre-Budget announcements aimed at giving fleets and drivers greater clarity on their future tax treatment.
Government has announced, outside of the normal fiscal process, that the van benefit charge and fuel benefit charges for cars and vans will be uprated by the Consumer Price Index from 6 April 2021. This has been announced to ensure employers and HM Revenue & Customes are given enough time to prepare for the uprate ahead of the 2021-22 tax year.
Treasury has also shared with the BVRLA that the Secondary legislation has been laid to reduce the CO2 emission thresholds for capital allowances/leasing restriction from April 2021, as announced at Budget 2020.
The Secondary legislation makes clear that the current 110g/km CO2 emission threshold will continue to apply to business car leases that were entered into before April 2021 for the remainder of the leasing contract. This will avoid businesses with pre-existing leasing contracts seeing an unexpected mid-contract increase in their tax liability.
The BVRLA will continue to engage with Treasury to encourage as much foresight on vehicle tax policy as possible.
If you have any feedback or questions, contact [email protected]. Members with an interest are also invited to join the BVRLA’s Tax Advisory Working Group.
