BVRLA Lobbies Chancellor to rethink Tax Changes
Following the most recent announcement of the government’s plans to eliminate 100% First-Year Allowances for low-emission leased vans and cars, the BVRLA (British Vehicle Rental and Leasing Association) has submitted a budget that warns that the action will serve as a disincentive that will discourage fleet purchasers from buying the green vehicles that would best help the government’s green energy goals.
The BVRLA is the national organization that represents companies that rent and lease cars and commercial vehicles in the United Kingdom, a group that represents approximately 2.75 million vehicles. BVRLA chief executive John Lewis has pointed out that the fleet industry has been a leader in the United Kingdom in meeting the goal of driving down CO2 emissions, but that the inroads that the industry has made could come to a screeching halt if the government follows through with its plan to remove the tax incentives that are currently in place.
The 100% First-Year Allowance provided fleet buyers to write off green vehicles (low-emission cars, trucks or vans) for the first year that the vehicle was owned by the corporation. This write-off compensated for the fact that low-emission vehicles are generally much more expensive to purchase. The government’s plan to eliminate this write-off in April eliminates the allowance for leased vehicles, which account for a large proportion of those that are currently being purchased. Fleet companies will likely stop purchasing the vehicles to rent to their clients if they lose the write-off, and will instead start purchasing higher emission vehicles again.
The BVRLA also included in their budget submission suggestions that the Approved Mileage Allowance Payment (AMAP) system be reviewed because they incentivise extra driving on the part of employees, thus driving up emissions, and also to review the Plug-in Car Grant, which has successfully subsidised list prices but has done little to encourage the purchase of cars that provide extremely low emissions.