Anyone reading this column will know that Europe means more than the dubious delights of a fortnight on a Costa. It’s the place where 70% of our new legislation originates, and that reaches into every aspect of our lives, whether it’s the health of farmed fish or the environmental impact of consumer electronics from Korea. And it’s also the place, like it or not, that will have an increasingly important role to play in our industry.
We have had a plethora of legislation directly affecting the industry over the past few years – block exemption, the Working Time Directive, End of Vehicle Life Directive, new VAT rules, digital tachographs, drivers’ hours, Internal Market Services Directive, Interoperability Directive, and the Capital Adequacy Directive. They all need to be dealt with.
And it’s not going to stop. So we have to be ready to monitor proposed new legislation, to recognise its impact and, if necessary, challenge it at the point of design – that is, before it has gone too far down the legislative process.
To attempt to change it later, once it’s become law, is like trying to push water uphill – or getting Ken Livingstone to see the London congestion charge as anything other than a money-raising exercise.
But not all new legislation affects the industry evenly. Some items will impact more heavily on leasing, some on rental, others still on commercial vehicles. There is now a growing recognition that vehicle rental in particular may be under-represented in the new Europe.
With the proposed merger of ECATRA – which represents rental in some countries – with LeaseEurope, which doesn’t at all, it would appear that rental is going to be far down the agenda of the merged association.
That’s why the European Issues Group has been developed. This is comprised of key rental players who have international businesses to maintain and of a growing number of interested national associations.
The aim of the EIG is not to duplicate work being done by others – unless it is felt that insufficient attention is being paid to a particular issue. The BVRLA is currently managing the group, and I see this as very much a function of our wider responsibilities since, by providing support for discussion and action on European issues, we are also supporting our members of all sizes in the UK.
The group’s first action has been on the vexed question of credit card charge-backs, along with the issue of the place of supply for goods or services for VAT purposes.
On credit card charge-backs the group has already engaged the Visa and Mastercard organisations. Charge-backs are a recognised target problem to the credit card companies as well, and it looks as though we shall be seeing some direct action there soon.
On the VAT issue, rentals of less than 30 days will continue to incur VAT in the place where the service is supplied, although this may mean business customers pay VAT in countries in which they are not established as a business.
For longer-term rentals it is being proposed that VAT will be charged in the country where the customer is based, which will remove the concept of VAT leveraged leasing.
The European Issues Group is not yet a constituted organisation. At some point it will probably be based in Brussels, but in the meantime it is a valuable addition to the European debate. I believe it will play an increasingly greater role in helping the EU Commission to develop and implement practical legislative solutions that meet the needs of UK and international rental companies and associations.