Error parsing XSLT file: \xslt\FacebookOpenGraph.xslt VED update to hit rental firms with 400% tax hike, claims BVRLA
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VED update to hit rental firms with 400% tax hike, claims BVRLA

Date: 07 February 2017   |   Author: Daniel Puddicombe

The British Vehicle Rental and Leasing Association has claimed changes in the VED regime will hit the rental industry with a 400% tax hike.

In 2015's summer Budget, 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.

The BVRLA said the new tax regime would not encourage rental companies to buy the latest eco-friendly cars.

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 could discourage buyers from choosing the greenest vehicles.

According to a report from Oxford Economics and published by the rental body, 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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