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BVRLA calls on HMRC for better deal on VAT reclaim for fleets

Having surveyed a wide variety of companies for their leased business cars’ mileage data, the BVRLA says it’s able to provide clear evidence that more than 60% of the total miles travelled annually by leased cars is for business use.

At present, businesses can reclaim 50% of the VAT incurred on the finance element of a company car lease or hire, and the European Commission has to approve this ‘derogation’, which requires the UK Government to justify and renew it every three years. The 50% rate has been set since 1995, and the current arrangement comes to an end on 31 December 2016.

BVRLA chief executive Gerry Keaney said: “The results of our 2015 survey provide robust evidence that the UK Government should now renew the VAT derogation to ensure UK firms leasing cars are able to lawfully and fairly reclaim 60% of the VAT paid on the finance element of hire or lease payments.”

The BVRLA has provided HMRC with the evidence from more than 61,000 leased vehicles used for business and private use. Between them, these drivers had covered more than 795 million miles in the past calendar year. It added that its broad sample of small and large businesses included firms that do and do not use a mileage capture system, and covered a wide range of industry sectors.

The BVRLA also thanked the following organisations for their help in compiling this data: ACFO, ALD Automotive, Alphabet, GE Capital Fleet Services, Inchcape, JCT600, LeasePlan, Lex Autolease, Marshall Leasing, Ogilvie, TCH Leasing, The Mileage Consultancy, Venson and Zenith Leasedrive.

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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.