The Finance & Leasing Association (FLA) and the British Vehicle Rental and Leasing Association (BVRLA) have called for changes to the UK government’s super deduction to give car leasing a “shot in the arm”.
The two industry associations have urged the government to make changes to ensure that vehicle leasing and equipment rental are included in the 130% allowance granted through investments in new equipment under the program announced in the March budget by Chancellor Rishi Sunak .
They have argued that the change could boost the economy at a time when some companies cannot afford to make huge investments, along with the UK’s plan to reintroduce electric vehicles (EV) as part of the new ban Gasoline and gasoline to drive sales of diesel vehicles in 2030.
Research by the Society of Motor Manufacturers and Traders (SMMT) recently found that only 4.6% of privately purchased cars (34,324 vehicles) were battery electric vehicles (BEVs) – compared with 8.7% (73,881 vehicles) for businesses and large fleets .
The discovery, made following the government’s decision to cut plug-in-car grant (PiCG) support from £ 3,000 to £ 2,500, led SMMT Managing Director Mike Hawes to state: “It is clear that this is was an electric revolution, especially for fleets, not families. “
Commenting on the benefits of changing the government’s super-deduction tax break this week, Stephen Haddrill, FLA director-general, said: “The government’s decision to limit the size of the super deduction is a seriously missed opportunity to boost investment.
“The idea that companies grow and become more productive by purchasing machines and systems directly is out of date. Leasing and renting make far more sense.
“It saves money in business and can prevent expensive equipment from idling.
“For this reason, 70% of the construction machines are rented out for certain periods of time. Government support needs to be geared towards the way business is actually done, not the way HMRC still thinks it is done. “
BVRLA Chairman Gerry Keaney said: “The government understands the important role the vehicle leasing sector is playing in meeting the UK’s road decarbonisation goals.
“It is all the more disappointing that leased vehicles were not taken into account in the Super Deduction approval criteria.
“This is a major oversight and an example of where the government has not reconciled its tax and environmental policies.
“More and more individuals and companies are turning to the leasing sector for cleaner vehicles, but the sector has not been immune to the effects of the COVID pandemic.
“With Clean Air Zones across the UK, this is the perfect time to incentivize the adoption of low-emission and zero-emission vehicles. Leasing allows companies to keep their money to get through the recovery phase.
“Questioning leased vehicles for super deduction would give a boost to many companies and would be a welcome shot in the arm for fleets.”