Press Release

A fleet-friendly tax regime can get car emissions back on track

Release Date: 
13/03/2018

The UK’s largest purchaser of new cars says it wants to work with Government to revive the electric vehicle market and reverse the recent increase in average new car CO2 emissions.

The British Vehicle Rental and Leasing Association (BVRLA), whose members are responsible for one-in-eight cars on UK roads, has written to the Chancellor ahead of the Spring Statement to make clear how working with the fleet sector to develop a fair and well-signposted Company Car Tax regime can encourage drivers to choose greener, cleaner vehicles.

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 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.”

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 putting the brakes on new EV registrations from company car drivers, who are postponing the jump to electric until the tax regime offers an incentive.

BVRLA members 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.

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, evidencing the trend of people 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.”

-ENDS-

Notes to editors:

The full letter to the Chancellor can be read here on the BVRLA website.

1 The latest BVRLA Quarterly Leasing Survey shows that average new car CO2 rose to 112.7g/km in Q4 2017, the highest level since Q2 2015. It has been rising steadily since Q3 2016 and, as a result, the average emissions of a new lease car are higher than the average CO2 for the total lease fleet, which stands at 112.6g/km.

On a more positive note, the same survey shows that plug-in vehicles are now responsible for 6% of new registrations, while 9% of registrations had some form of electric powertrain.

About the BVRLA
Established in 1967, the British Vehicle Rental and Leasing Association is the UK trade body for companies engaged in the rental and leasing of cars and commercial vehicles. Its 900+ members operate a combined fleet of around 4.8million cars, vans and trucks. BVRLA members buy nearly half of all new vehicles sold in the UK, supporting around 317,000 jobs and contributing nearly £25bn to the economy each year.

By consulting with government and maintaining industry standards, the BVRLA helps its members deliver safe, sustainable and affordable road transport to millions of consumers and businesses. For more information, visit www.bvrla.co.uk/about.

You can access BVRLA images at www.flickr.com/photos/bvrla/albums

For more information, contact:
Toby Poston – Director of Communications & External Relations
toby@bvrla.co.uk
tel: 01494 545700
mob: 07979 756533

Andrea Davies - Media Relations & Communications Manager
andrea@bvrla.co.uk
tel: 01494 545710
mob: 07790 271806