Failure to support the fleet sector with a fair and consistent tax regime will seriously threaten Government attempts to decarbonise road transport.
This is the stark warning in the BVRLA’s response to HM Treasury’s Review of WLTP and Vehicle Taxes.
The association used its submission to remind policy makers of the key role the company car and vehicle rental fleet has played in both buying new ultra-low emission vehicles and then reselling them into the used market.
The BVRLA cautioned that recent hikes in company car taxes, when combined with WLTP-related uncertainty and a lack of visibility on future rates beyond 2021, had already led to more employers and employees opting out of the market. In most cases staff end up driving a more polluting personal lease or grey fleet vehicle. As a result, some of the fleet industry’s recent progress in reducing vehicle CO2 is already being reversed. If the government fails to manage the impact of WLTP-based company car tax this trend will only accelerate.
The average rental car emits 26% less CO2 than the average car on the road, but WLTP-based Vehicle Excise Duty is set to punish rental operators with an increase of £28m in their combined 2020/21 tax bill. BVRLA members have already warned that they will need to lengthen their fleet operating cycles to absorb this extra cost, reducing the speed at which they can acquire newer, cleaner vehicles.
“Our members buy nearly 1.6 million cars each year and are responsible for most ultra-low emission vehicle registrations,” said BVRLA Chief Executive, Gerry Keaney.
“Most policymakers recognise the vital part that these fleets will play in delivering the government’s flagship Road to Zero and Industrial Strategy.
“We need HM Treasury to acknowledge and support the fleet sector’s role by providing a fair, consistent and well-signposted tax regime.
“WLTP is designed to offer motorists greater transparency. It should not be used as an excuse to boost Treasury coffers. Without making the necessary WLTP-related vehicle tax adjustments, the Chancellor will be simply abusing his position by opportunistically raising taxes and punishing already hard-pressed families and businesses.”
Concerned that government’s continued lack of alignment of its taxation and environmental policies will result in a failure to remedy the current vehicle tax regime, the BVRLA is urging industry colleagues to respond to the consultation, which closes on 17 February.
In its response the BVRLA is calling upon government to demonstrate its support for businesses by:
- Adjust future VED and company car tax bands for 2020 and beyond to account for the increase in WLTP-based CO₂ figures
- Provide a legacy CCT table for pre-April 2020 vehicles, freezing the rates at 2018/19 level
- Provide a 4/5-year view of future company car tax and VED bands, enabling fleets and drivers to plan their vehicle choices
- Ensure that all CO₂-related taxes and charges (e.g. congestion zones, lease rental restriction) are treated consistently under WLTP