THE British Vehicle Rental and Leasing Association (BVRLA), the body responsible for one-in-eight cars on UK roads, wants the Chancellor to make company cars more attractive ahead of the Spring Statement.
The BVRLA has said it wants to make clear how working with the fleet and business sector with a well-signposted Company Car Tax regime can encourage drivers to choose greener, cleaner vehicles.
It says that such proposals would also reverse the recent increase in average new car CO2 emissions.
SMMT data shows CO2 emissions rising
Recent data from the SMMT has shown that average new car CO2 emissions have started rising for the first time in almost 20 years. It also showed that sales of pure electric cars have fallen by a third in the first two months of 2018 compared to the same period of 2017.
The BVRLA believes that the Government can help reverse both these trends by making some adjustments to the Company Car Tax regime.
“Our members are keen to accelerate the uptake of newer and more efficient vehicles and are already responsible for the majority of plug-in car registrations,” said BVRLA Chief Executive, Gerry Keaney.
“They tell us that the current Company Car Tax regime is making these vehicles less attractive to employees.”
Bring forward 2% Company Car Tax band for EVs
In a letter to the Chancellor ahead of the Spring Statement, the BVRLA has urged him to accelerate the introduction of its 2% Company Car Tax band for zero-emission vehicles.
This tax band is currently scheduled to increase over the next two years to a high of 16% in 2019/20, before dropping to 2% the year after.
There are signs that the current tax rate is dissuading company car drivers from making the jump to EVs until the tax regime offers an incentive.
The BVRLA said it would also like to see further clarity on Company Car Tax rates beyond the 2020 tax year. The association believes that many people are abandoning their company car and making their own arrangements due to uncertainty over what their tax bill will be in the future.
Company cars have some of the lowest carbon emissions on UK roads, largely because many firms set a maximum CO2 limit and Company Car Tax payers are incentivised to choose low or zero emission models.
Company Car Tax changes encourage drivers into personal leasing
The BVRLA believes that recent changes to the Company Car Tax regime have reduced the impact of these incentives and encouraged many employees to leave their company car scheme and either lease their own vehicle or use an existing household one.
The latest BVRLA figures for Q4 2017 show that the business lease fleet shrank by 2% year-on-year, while the personal lease market grew by 20% in the same period. It said that this was further evidence that people were moving away from company cars.
BVRLA member data shows that this can have a huge impact on CO2 emissions, with the average new personal lease car emitting 125g/km of CO2, 14% more than its new company car equivalent, which has average emissions of just 110g/km.
“With frequent and well managed fleet replacement cycles, BVRLA members are responsible for nearly 50% of new car registrations,” added Keaney.
“We want to work as a constructive partner with government, delivering a rapid shift to zero-emission motoring, while recognising the need to sustain tax revenues.”
Further reading on Company Car Tax
Check out the new Company Car Tax tables for 2020/21