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From midnight tonight (31/03/2017 to 01/04/2017), the new Benefit in Kind (BIK) tax bandings and the new VED regime will come into force.
BIK rates are set to rise by two rates, meaning that from tonight, those with petrol cars with emissions of 190g/km of CO2 or more will be paying the full 37% rate.
Those with diesel-powered cars, meanwhile, will be liable to pay the maximum rate if their vehicle emits more than 175g/km of CO2.
BusinessCar has published a table detailing the future BIK rates until the 2019/2020 tax year.
VED rates also face a radical shake-up from midnight. In 2015's summer Budget, the then-chancellor George Osborne announced plans for a new tax system from this April that would link to CO2 emissions for the first year, and then calculate tax based on the vehicle's list price in subsequent years and remove the ability to gain a refund on any first year-year tax not used.
From the second year onwards, petrol, diesel and hybrid cars that cost less than £40,000 will incur a flat rate of £140 regardless of vehicle emissions, which, according to some industry bodies could discourage buyers from choosing the greenest vehicles.
The BVRLA repeatedly claimed these VED changes could hit the rental industry with a 400% tax hike, and would encourage rental companies not to buy the greenest cars.
According to a report from Oxford Economics and published by the rental body in February, the average duty for rental vehicles - which have a typical fleet life of nine months - will jump from £36 last year to £170 from April.
As a result of this, the rental industry's tax bill will hit £55m this year, up from £11 in 2016, the rental body claimed.
The rental sector buys around 324,000 cars a year, and the BVRLA said this figure will fall by 24,800 units a year, as companies will lengthen their operating cycles to negate the impact of the VED hike. causing knock-on effects to the environment, as many older rental cars are not fitted with the latest eco technology.
Our members are facing a 400% increase in one of their main tax bills, and the inability to claim a refund on any unused portion of the VED is totally inconsistent with usual UK tax policy," said BVRLA chief executive Gerry Keaney. "Rental companies account for a substantial proportion of new, low-emission car purchases in the UK, and if these changes go through, the Government will seriously damage its green agenda and air quality goals.
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