The Chancellor’s Pre-Budget Report (PBR)
should be used by the government as an opportunity to “clear up all
remaining uncertainty surrounding the major Corporation Tax Review
planned for April 2009”, said the British Vehicle Rental and
Leasing Association (BVRLA).

The association has consulted with HM Treasury on the areas in
which fleets need clarification. They are:

• Transitional Rules – businesses need to know how long cars
  purchased or leased before April 2009 will be ‘grandfathered’ in
  the current regime
• The lessee chain – the fleet industry needs confirmation that
  only the final customer in the lease chain is subjected to a lease
  rental restriction (LRR). This would remove the current, unintended
  consequence of the proposed tax review, where all the parties in a
  lease chain are hit by the LRR

 

The BVRLA acknowledged that the current economic situation made
it unlikely that motoring taxes would be cut, but asked for the tax
regime to be made more “equitable”, by reducing the scale of the
planned increases in VED for existing higher emission cars
(emitting more than 180g/km CO2), and by removing the “unjustified”
3 per cent diesel supplement from company car and fuel
benefit-in-kind taxation.

“We can understand the Treasury’s argument for increasing VED
for new higher polluting cars, but we feel the scale of the rise is
unfair on people who have already purchased cars expecting to see
the traditional inflationary increases in excise duty,” said John
Lewis, BVRLA director-general.

“With today’s modern diesel engines there is no justification
for a 3 per cent supplement in BIK taxation. The government has
already got rid of the diesel supplement in VED, it needs to do the
same with company car tax,” Lewis added.