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BVRLA calls for industry responses to vehicle tax consultation

By / 2 months ago / Latest News / No Comments

The BVRLA, along with other leading trade bodies, is urging fleets to take action on the current government consultation on changes to vehicle tax as the deadline for submissions looms.

Toy car on pile of money

The BVRLA has expressed concerns that the Government will not take action to mitigate the effects of WLTP on CCT and VED

The consultation follows the introduction of the new, more accurate WLTP test procedure, which will be used to provide CO2 figures for both company car tax and Vehicle Excise Duty from April 2020. It will potentially bring much higher costs for both for fleets/drivers; WLTP is expected to increase most cars’ reported CO2 figures by 10-20%.

In its consultation, the Government is seeking more information on the impact of WLTP on CO2 emissions and how it should adjust VED and CCT.

However, the BVRLA – as well as other organisations – has expressed concerns that the Government will fail to remedy the current vehicle tax regime, leading to a higher tax take for the Treasury.

BVRLA chief executive Gerry Keaney said: “WLTP is designed to offer motorists greater transparency. It should not be seen as an opportunity for the Chancellor to boost the Treasury coffers. Without making the necessary WLTP-related vehicle tax adjustments, the Chancellor will be simply abusing his position by opportunistically raising taxes and punishing hard-pressed families and businesses.”

His calls are being backed by a number of fleet firms who say that the Government must take action to help fleets plan ahead – including publishing BIK thresholds for the coming years.

Martin Brown, managing director of fleet management and leasing specialists Fleet Alliance Group, said the industry needs greater clarity from officials at Westminster so that companies could plan fleet policies with more confidence.

“With the likelihood that CO2 values are likely to increase for individual models under WLTP, it is very difficult for us to advise our clients which are the most suitable vehicles to select for their fleet policies.

“The Government needs to bring  greater clarity to the situation when it announces the results in March so that we can help fleet decision-makers plan their future polices with confidence,” he said.

“What we need to see now is more government support, clarity and a consistent – rather than a knee-jerk – approach to transport policy. Which is all fleets really want,” he added.

Seán Kemple, director of sales at Close Brothers Motor Finance, also said that urgent action is needed to stem the growing numbers of drivers opting out of company cars, which is bringing numerous knock-on effects: “One of the big impacts of WLTP is that company car drivers are holding onto their vehicles for longer, and we can see that in the most recent new car registrations last month: while private car sales were up, fleet and business sales down – and quite significantly down. Drivers are unsure about what they will be paying in Benefit In Kind in the future, and are switching the terms of their leases from two, three, or four years to three, four, or five years. Subsequently, this has a knock-on effect on wholesale, cutting off a stream of stock to the used car market. Secondly, we’re seeing a number of customers moving away from a company car and over to a PCH plan to take advantage of the cash allowances offered by businesses.”

The BVRLA is urging fleets to take action on the vehicle tax consultation by sharing any evidence of how the progression to WLTP-based tax will unfairly impact drivers and fleet operators. This evidence can then be used in its consultation response.

For more details of the BVRLA campaign, click here.

To access the Government details of the WLTP review and make a submission direct, click here.

For more of the latest industry news, click here.

Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.