A Cheshire headquartered vehicle rental specialist is calling on the Government to reconsider planned changes to the Vehicle Excise Duty (VED).
Regal Rentals, an independent licensee for AVIS Budget, says there is still time for Ministers to rethink before the changes come into force on April 1.
The reforms will see the introduction of revised vehicle tax rates on new registrations based on the carbon dioxide (CO2) emissions of each vehicle.
A flat standard rate of £140 will apply in all subsequent years, except for zero emission cars which will pay nothing. Cars with a list price in excess of £40,000 will incur a supplement of £310 on their Standard Rate for the first 5 years in which it is paid.
In addition, if ownership of a car is transferred within the first year, a refund will only be paid on the standard rate rather than the first year rate.
Jamie Frost, Managing Director of Regal Rentals, which has branches across the North of England and Scotland, said: “UK car rental companies such as ourselves typically keep vehicles for an average of six months. These changes will result in a deficit in the tax we can claim back.
“The duty hike will hit the car rental industry particularly hard with an estimated 400% VED rise in the first year, from £11million in 2016 to £55million in 2017 with the lack of refund responsible for £14million of this.
“As well as damaging our ability to buy the newest, cleanest vehicles, these tax increases are likely to result in higher rentals prices for our customers and put further pressure on UK inflation.”
Jamie added: “As a company which provides rental vehicles to businesses and the public, we are deeply concerned at the potential impact these changes will have upon our business. We operate 1,250 vehicles in our fleet, purchase an average of 2,000 vehicles every year and support 115 jobs.”
Regal Rentals, whose head office is in Mollington, Chester has won the backing of local MP Christian Matheson, who has written to Chancellor Philip Hammond appealing to him to reconsider.
In his letter, Mr Matheson says: “My constituent is deeply concerned about the potential impact the changes will have on his business. He would like you to reconsider these changes as a matter of urgency and ensure that any individual or business selling a vehicle in the first year is able to recover the full remaining tax paid.”
A recent analysis of the British Vehicle Rental and Leasing Association (BVRLA) member data indicated that the leasing and rental industry will buy 24,800 fewer cars this year as a result of the VED change, which will have a major knock-on effect on the environment.
Gerry Keaney, Chief Executive of BVRLA has said: “Rental companies account for a substantial proportion of new, low-emission car purchases in the UK, and if these changes go through, the Government will seriously damage its green agenda and air quality goals.”
For more information on the official changeshttps://www.gov.uk/government/publications/vehicle-excise-duty