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An independent think tank has ruled that the Government's removal of the 100% writing-down allowance for leasing firms will harm electric vehicle uptake in the corporate sector, and should be reversed.
The Institute for Public Policy Research (IPPR) said in its report on ultra low-carbon vehicles (ULEVs): "The changes made in the 2012 Budget. have had a serious impact on the fiscal incentives available to support uptake, particularly by public sector bodies.
"The removal of the availability of 100% first-year capital allowances to leasing and rental companies could add 3-5% to the cost of a car lease, or up to £15 per month on a £300 per month lease.
"For a fleet of 25 ULEVs financed over a four-year period, this adds a total of £18,000 to the cost of that fleet.
"We recommend the Government immediately reinstates the 100% first-year capital allowance availability for leasing and rental companies."
Reacting to the report, outgoing BVRLA chairman John Lewis said: "We are delighted that this independent report has recognised the vital importance of the vehicle rental and leasing industry in driving the uptake of ultra-low emission vehicles, something that the Government has chosen to ignore.
"We will continue to lobby for them to reinstate 100% first-year allowances for our sector. Sales of new ultra-low carbon vehicles will not progress as everyone wants them to unless this happens."
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