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Treasury must use Autumn Statement to end tax unfairness on rental and leasing industry, says BVRLA

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BVRLA chief executive Gerry Keaney has written to Chancellor of the Exchequer Philip Hammond asking the government to address the unfair tax burden on the vehicle rental and leasing sector.

As well as calling for cars to be exempted from recent proposals to hike taxes on certain employee benefits, the BVRLA is also using its Autumn Statement submission to highlight a number of areas in which the government could support the rental and leasing industry.

Commenting on the submission, Keaney said: “HM Treasury must reconsider the company car taxation regime and the impact it has on a major tax revenue-generating sector. Whether it’s the planned salary sacrifice proposals, the incoming 2% company car tax increase from 2017-18 or the decision to push back the removal of the 3% diesel supplement until 2021, our members and their customers have been disproportionally hit with a higher tax burden than other industries, and we’re concerned about what impact these measures will have on demand for low-emission vehicles, not to mention the Government’s air quality and road safety goals.”

The BVRLA’s submission comes ahead of the Autumn Statement on November 23, and follows a number of government consultations that will affect the automotive industry. The association has suggested that the Chancellor considers reviewing the vehicle excise duty (VED) refund rules which restrict the amount of tax refunded when a vehicle is disposed of in the first year. This will impact rental companies from April 2017 as these companies will no longer be able to get a full refund for any vehicles emitting more than 110 g/km CO2.

Keaney added: “At a time when the UK economy and the automotive market require stability and reassurance from the Government, HM Treasury should revise the refund rules so that when a vehicle is disposed of in the first year, the refund is based on the first year rate, not the standard rate.”

Separately, the Department for Transport has said that it would like to introduce new bands for ultra-low emission vehicles in the company car tax system beyond 2020. The BVRLA has responded to a consultation on this topic as HM Treasury looks to explore how best to incentivise the cleanest cars into the next decade, during which time rapid innovation will deliver significant changes in the way vehicles are powered.

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