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Fleet industry figures have called for the scope of full expensing to be widened, following Chancellor of the Exchequer Jeremy Hunt's Autumn Statement.
During his speech, Hunt confirmed that full expensing, which allows businesses to write off the full cost of plant and machinery investment, would be made permanent.
The measure can apply to trucks and vans - but not to cars, and also not to vehicles purchased with the intention of leasing.
Reacting to the Autumn Statement, Caroline Sandall-Mansergh, consultancy and channels development manager for Alphabet GB, said: "We welcome the permanent implementation of full expensing to encourage continued support for spend on machinery such as vans; this will create a lower cost of entry for enterprises looking to invest.
"However, the scope of the policy must go further, expanding to cars and leased vehicles that will further promote fleet growth across the UK. We hope that over the coming months the Chancellor will work closely with the industry to develop a policy that broadens fleet support overall."
ALD Automotive | Leaseplan UK managing director Alfonso Martinez said: "Businesses will undoubtedly welcome the Chancellor making the 'Super Deduction' . permanent. Unfortunately, cars are exempt from this scheme, and so are vehicles that are bought with the intention that they will then be leased. This means that leasing companies cannot reduce their tax bills accordingly and pass on the savings to their customers.
"The BVRLA, along with a working group made up of ALD Automotive | LeasePlan, Lex Autolease and Europcar, has spent most of this year working with HM Treasury to develop a policy solution that closes this gap.
"We were hoping for an announcement during the Autumn Statement, but the Chancellor has yet to act."
BVRLA chief executive Gerry Keaney said: "The government is banking on permanent full expensing to unleash a wave of new business investment across the UK, but by excluding rental and leasing it is missing a massive opportunity.
"Our research shows that opening these powerful tax incentives up to the rental and leasing sectors could unlock an additional £1bn worth of investment into low and zero emission commercial vehicles.
"We will continue to work closely with HM Treasury and HMRC on their technical consultation and push for the unfair vehicle rental and leasing exclusion to be removed."
The statement contained no announcements on fleet-specific matters such as company car tax, and there was also no mention of fuel or EV charging taxes.
As previously announced, £4.5billion to support advanced manufacturing included £2billion for zero-emission vehicle production.
One matter that has been raised by fleet industry figures is how changes to wage legislation might affect salary sacrifice.
Martinez said: "Raising the living wage and reducing the base rate of Class 1 Employee National Insurance Contributions (NICs) by 2% points (from 12% to 10%) will be welcomed by households during the ongoing cost-of-living crisis. However, these changes inadvertently affect the salary sacrifice schemes which are making electric vehicles more accessible to drivers.
"Salary sacrifice enables drivers to lease vehicles through their employer and pay for them with their pre-tax income. As long as the vehicle emits 75g/km CO2 or less (which is true of most plug-in hybrid or electric cars), income tax and Class 1 NICs are based on the remaining salary, while the driver pays Benefit in Kind for the vehicle and their employer pays Class 1A NICs for providing it.
"With company car tax bands as low as 2% for electric vehicles, this usually helps employers to cut their NIC bill while offering an affordable way for drivers to go electric.
"The Chancellor's decision not to adjust Class 1A rates means employers won't see any reduction in their NICs, which could in turn be passed on to employees - who would normally cover those costs. Furthermore, the increased living wage means some employees will no longer be eligible, as the vehicle payments would take them below that threshold.
"With the latest BVRLA statistics showing 91% of salary sacrifice deliveries are electric, the Chancellor needs to be careful not to undermine the benefits of a system which is enabling drivers to switch to the cleanest vehicles."
Sandall-Mansergh said: "As the National Living Wage increases, the threshold for salary sacrifice eligibility increases with it, meaning lower-earning employees may not be granted the benefit.
"With this in mind, it will be important for those who manage fleet to review the schemes they have in place, seeking expertise where needed, to ensure employees' access to benefits such as company vehicles can remain in place without significant disruption."
One aspect of the statement noted by Novuna Vehicle Solutions managing director Jon Lawes was a plan to reform electricity grid access, which could have implications for the installation of EV charging infrastructure.
Lawes said: "Policymakers have been sending mixed signals on the UK's transition, so the plans announced in today's Autumn Statement to earmark £2billion for zero-emission vehicle development, reform electricity grid access and support business investment are welcome.
"Now the government must show how this will lead to concrete outcomes, including with its promised consultation on fast-streaming EV charging rollout.
"There is an urgent need to boost net-zero infrastructure around the UK, and improve EV purchase incentives. It is vital that these measures translate into local investment which provides businesses and consumers with the confidence to make the switch."
Giving his reaction to the statement, Association of Fleet Professionals (AFP) chair Paul Hollick said: "The public finances are in slightly better shape than expected and inflation is now below the Prime Minister's stated 5% target, so this Autumn Statement was very much about cementing the idea - if not necessarily the reality - of economic recovery ahead of next year's election.
"The measures taken, especially those to encourage investment, are to be welcomed in general terms and some businesses operating fleets will no doubt take advantage of them. However, it doesn't change the underlying truth that the economy remains in pretty poor shape and that while inflation is falling, it remains relatively high.
"There's also little in there to specifically support the motor industry or the fleet sector, although the £2billion allocated to EV manufacturing is to be welcomed and the planning changes for chargers could potentially speed rollout."
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