The British Vehicle Rental and Leasing Association (BVRLA) has called on the chancellor to consider the adverse implications if he announces further tax burdens on the company car market.

The rental body’s chairman, Gerry Keaney (pictured above), drew a parallel between business motoring tax rises and more people deciding to take cash allowances instead of taking on company vehicles.

According to figures released by the Department for Transport in June, the number of company car drivers has remained static for the last seven years, while the BVRLA said the economy has grown “considerably” during the same period.

The BVRLA claimed that many would-be company car drivers have chosen to finance their own vehicles in light of what the rental body called a “steep rise in company car benefit-in-kind tax rates”, with the BVRLA adding there has been a “significant” rise in personal contract hire deals.

According to the BVRLA, the average company car produces lower CO2 emissions than new cars, with the body speculating that the tax hikes have contributed to a rise in average new car emissions.

“Successive budget announcements have seen the overall tax take from the business motoring sector rise sharply and this is now having a negative impact on average car CO2 emissions, which have risen year-on-year,” Keaney said.

Elsewhere in its submission, the BVRLA made the following recommendations:

  • Review of the VED regime to encourage selection of the cleanest and greenest cars
  • Amendment of the VED refund rules to allow rental companies to get a full refund on cars sold in the first year
  • Bring forward the introduction of the 2% zero emission band for the company car tax regime to 2018/19
  • Enhanced capital allowances for leased commercial vehicles
  • Change to VAT rules to allow full reclaim of VAT on electric vans with a payload of less than one ton.