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Sharp increases in Vehicle Excise Duty (VED) announced by the Chancellor last month are expected to have a notable impact on the rental sector. Having targeted non-electric vehicles with high increases from April 2025, the revised VED rates were discussed as part of the BBC’s Wake Up to Money radio show last week.

Last week’s Budget was publicised beforehand as being a painful one, with difficult decisions needing to be made. Its contents demonstrated the challenging economic climate facing the nation, but did contain some green shoots around road transport decarbonisation.

From 1 April 2025, keepers of electric and low emission vehicles will need to pay vehicle tax in the same way as keepers of petrol and diesel vehicles.

The BVRLA has updated its Vehicle Excise Duty fact sheet to clarify which vehicles are subject to the Expensive Car Supplement once the exemption for zero-emission vehicles is lifted in 2025.

Last week Chancellor Jeremy Hunt set out the government’s tax and spending plans. The headline announcements in the Spring Budget spanned national insurance, childcare, and fuel duty. Of significance to BVRLA members are the plans to extend full expensing to rental and leasing, following extensive consultation including the BVRLA and other associations.

The Chancellor’s recent Autumn Statement had a heavy focus on supporting workers via various wage support measures. For companies, a major change was announced to incentivise investments, but it came with a longstanding sting in the tail.

The Government has been criticised for not having a plan on road pricing, more than a year on from the Transport Committee publishing its Road Pricing report. That report called for urgent progress to be made, a stance that the association fully backs.

The BVRLA is urging the Government to show yet more net zero ambition in its fiscal plans by using the upcoming Spring Budget to encourage wider adoption of electric vehicles. As part of its Budget submission, the association has outlined four key asks that will support the UK’s drive to decarbonise.

The Autumn Statement brought about a change in Vehicle Excise Duty (VED) for electric vehicles. From April 2025, electric vehicles registered from 1 April 2017 will begin to pay VED in the same way as petrol and diesel vehicles, moving to the standard rate (currently £10) for the first year of registration and the flat rate from the second year of registration (currently £165 per year).

Here, BVRLA head of policy and public affairs, Thomas McLennan looks at the key announcements from the 2022 Autumn Statement and what they mean for the fleet sector.

Members are reminded that, due to vehicle lead time extensions which result in manufacturer price rises and specification changes, it could be that vehicles around the £38,000/£39,000 price bracket may end up going over £40,000. 

The BVRLA has submitted views to the Transport Select Committee’s inquiry into zero emission vehicles and road pricing.