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BVRLA calls Budget tax changes claims "scaremongering"

By / 5 years ago / Latest News / No Comments

Writing in HR magazine, Alastair Kendrick, employment tax director at MHA MacIntyre Hudson claimed: ‘My expectation is that this Budget will see the Government announcing an aggressive plan for company car taxation.’

He added: ‘This creates uncertainty over the future of company cars and the leasing industry as a whole. In 2002, there were over 1.3m company cars on our roads but this has rapidly decreased to reach a low of around 900,000. Following changes to be announced in the Budget, this number will drop to 500,000 by the end of 2015. 

‘Many businesses have already stopped company cars as a benefit and I predict this trend to continue.’

However, BVRLA chief executive John Lewis disagreed. He said: ‘Mr Kendrick earns a living persuading firms to give out cash alternatives to the company car and has tried to sensationalise the market to his own benefit before. This pathetic attempt at scaremongering and cheap PR is unlikely to earn his new employer anything but ridicule.

'The government introduced its emissions-based company car tax regime in April 2002 and it is acknowledged as a total success. Since then, a reasonable, well-signposted tightening of the CO2 threshold has encouraged carmakers to produce lower emission vehicles and incentivised fleets to choose them, with many drivers paying less tax each time they change their car.

'The current tax regime has been such a success that the average newly-registered company car now has lower emissions than its privately-owned equivalent. This so-called tax expert would have us believe that the government is changing course and wants to use the tax system to drive employees into older, more polluting, grey fleet cars, losing millions of pounds of tax revenue in the process.

Defending the figures provided and commenting on the BVRLA's reaction, Alastair Kendrick further added: 'We believe it is important that the industry considers the impact of the tax changes and its impact on the future of the company car.

'We note that we have been challenged on the figures of company cars but our data was supplied from a reliable source – the SMMT. We are concentrating here on cars provided to employees on which a benefit in kind arises (as would be HMRC’s definition) and we appreciate this has seen a lot of discussion in the past. 

'Many employers are currently reviewing the use of their car fleet.  Whilst this may mean moving people to cash, we are helping the majority with examining strategic options around fleets, including selection, funding and procurement arrangements.'

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