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BVRLA calls for support for company cars amid market decline

Date: 28 June 2019   |   Author: Sean Keywood

The government needs to make BIK tax changes after statistics showed a decline in company cars, according to the BVRLA. 

Statistics published by HMRC show that during 2016-17 there was a drop of  20,000 in the estimated number of company car drivers, followed by a 50,000 drop in 2017-18, leaving the total at 890,000.

HMRC has cautioned that an increase in voluntary payrolling - an alternative way of recording company car tax - may account for a significant proportion of the apparent decline. 

However, the BVRLA says the figures reflect reports from its members of a reduction in company car demand, which it puts down to an uncertain and unsupportive tax regime. 

It says that although the figures are historic and do not reflect the picture today, it believes the downward trend will continue until the government makes changes to the vehicle tax system.

The BVRLA says persistent tax rises, uncertainty in future rates and confusion around the tax implications of WLTP are all factors hindering the uptake of company cars. 

BVRLA chief executive Gerry Keaney said: "We hear the government committing to its zero emission road transport ambitions, but we fail to see them aligning their fiscal policy to help support it. 

"Our members make rational, cost-based decisions and are buying plug-in vehicles at scale which go on to feed the used car market. By getting the company car tax system right, the government can achieve some quick wins. 

"With the average newly registered company car emitting 19% less CO2 than the average grey fleet car, the government can speed up delivery of its air quality ambitions by having a tax system that incentivises drivers to take a company car."

Keaney said the BVRLA has continued to engage regularly with HM Treasury and had met with officials at Downing Street to warn of the risks of failing to align environmental and fiscal policies. 

He added: "The contents of the government's Draft Finance Bill, due to be published on 11 July, will tell us whether they have actually been listening."