The BVRLA has called on the chancellor to continue financial support for the vehicle rental sector as it warns that SMEs are particularly struggling in the pandemic.

The BVRLA says the vehicle rental sector has been disproportionately hit by restrictions on travel and movement during the pandemic

The organisation is urging the chancellor to extend furlough until the end of national restrictions, provide business rates relief for another year and extend the deadlines for repaying deferred VAT and increase flexibility.

Its new published Business Impact Survey highlights businesses’ continued reliance on these three key government support measures.

The survey shows how the leisure market for the vehicle rental sector has been particularly impacted by Covid-19. More than three-quarters (77%) of vehicle hire firms have reported a fall in annual sales transactions, with just over a quarter (26%) say they’ve seen transactions plummet by more than 50% compared to 2019. The adverse market conditions also led to 70% of rental firms reducing their workforce, many by more than 25%.

BVRLA chief executive Gerry Keaney said: “The vehicle rental sector has continued to make a vital contribution by keeping goods and people moving during this pandemic. At the same time, it has been disproportionately hard hit by restrictions on travel and movement, resulting in a cliff-edge drop-off in the leisure customers that generate around 40% of all UK vehicle hire transactions each year.

“With the vaccination programme underway and the roadmap out of lockdown now laid out, the sector is feeling more confident that the tide will turn in the next 6-months. Until then, it needs continued support from government.”

The BVRLA has also reiterated its earlier call for three critical measures to support the fleet sector’s recovery:

• A one-year freeze in Vehicle Excise Duty (VED).
• “Lock in” the previously announced Benefit-in-Kind freeze and publish 2025-26 rates.
• Create a ‘Green Investment Allowance’ to unlock private investment in electric vehicle charging.

It says these actions will also help accelerate the move to a net-zero road transport system.

The BVRLA has also said the Government’s close work with business fleets to develop a set of powerful grants and tax incentives and invest in a robust public charging network must remain a focus in the Budget, in order to drive take-up of zero-emission cars and vans.

Speaking at the start of the year when the 2020 new car registration figures were announced, Keaney said: “The chancellor must continue to ring-fence the long-term grants and tax incentives that make electric vehicles affordable. He must also resist the urge to pile more motoring tax increases on fleets and drivers that have yet to make the transition to zero-emission motoring.”