26 September 2017

BVRLA calls for ‘progressive company car tax regime’ to stop high CO2 PCH opt out

The government has been urged to introduce a ‘progressive company car tax regime’ that does not encourage employees to opt into personal contract hire (PCH) schemes and selecting vehicles with higher carbon dioxide (CO2) emissions than they might have selected via a corporate scheme.

The British Vehicle Rental and Leasing Association (BVRLA), of which Activa Contracts is a member, made its plea after publishing new data highlighting that the total business fleet leasing market for cars and vans had grown 7.6% year-on-year to 1.35 million vehicles.

Meanwhile, average CO2 figures for newly registered lease cars grew to 111.8g/km in Q2 2017, up from 110.8g/km (+0.9%) from the previous quarter and up 0.7% compared to the same period in 2016.

The main reason for the rise, said the BVRLA, was likely to be the increasing share of PCH vehicles within the wider leasing fleet. The average PCH car on BVRLA members’ fleets had emissions of 120g/km CO2, compared to the 111g/km of those on contract hire.

BVRLA chief executive Gerry Keaney said: ‘PCH continues to drive growth in the car leasing market and this is having a clear impact on the automotive industry’s long-term goal of reducing CO2 emissions.Company cars are cleaner than the average privately procured car, and the government should be supporting this market with a progressive company car tax regime that doesn’t encourage people to do their own thing.’