BVRLA urges revamp to tax incentives
- Posted by: Alan Feldberg
- Category: News
The BVRLA and six other leading trade associations have urged the government to modernise tax incentives to encourage further business investment in new vehicles and equipment.
The associations have written to the Chancellor, expressing concerns that the eligibility criteria for the 130% super deduction allowance (SDA) fail to include leasing and short-term hire – two of the most common ways that businesses acquire new plant and machinery.
This means that only businesses that purchase new vehicles or equipment outright can access the allowance – despite the fact that thousands of companies rely on leasing and rental to finance these acquisitions.
For the commercial vehicle sector, one in five trucks and one in six vans on UK roads are rented or leased.
Gerry Keaney, chief executive officer of the British Vehicle Rental & Leasing Association, said: “With the UK economy still emerging from the impact of the Covid-19 pandemic, the government is urging fleets to spend billions of pounds on new ultra-low emission vehicles.
“A huge proportion of this investment will be made through vehicle leasing and rental, which provides businesses with the fixed cost and flexibility they need to continue decarbonising.
“The eligibility restrictions on the super deduction mean that this tax incentive is only benefiting the larger, cash-rich businesses that can afford to buy vehicles outright.
“The government must move with the times and use investment incentives that support the acquisition methods modern businesses rely on.”