John Lewis the chief executive of the British Vehicle Rental and Leasing Association (BVRLA) welcomes the company car tax holiday announced in today's Pre-Budget Report.

In today’s Pre-Budget Report, Chancellor Alistair Darling announced that he would be exempting electric cars and vans from Benefit–in-kind tax for five years from April 2010.

 

He also announced the introduction of a 100% first-year allowance for companies purchasing electric vans, enabling them to offset the cost of buying one of these vehicles against their corporation tax bill in year one.

The BVRLA will be working with HM Treasury to ensure that leasing firms supplying electric vans will be able to pass on the benefits of these allowances to the customer.

 

“We are really pleased that the Chancellor has listened to our call to modernise the business tax regime and give a clear, long-term incentive for companies willing to be early adopters of electric cars and vans,” said Lewis.

“Together with the £2,500 - £5,000 incentive the government is planning to introduce from 2011 for people buying ultra-low carbon cars, these new measures will help speed-up the mass market adoption of sustainable road transport in Britain.

"We believe business users will be at the forefront, but all this depends on manufacturers swiftly coming to market with attractive, affordable, reliable and safe electric vehicles.”

 

 

The BVRLA has also criticised the Chancellor for adopting an inconsistent strategy in his attempts to reduce road use.

 

“On the one hand the government is increasing fuel duty and fuel benefit charges in a bid to encourage people to consider greener motoring,” said Lewis.

 

“But it has ignored our calls to change the structure of the Approved Mileage Allowance Payment (AMAPs), so that the 4 million claimants are incentivised to use more fuel-efficient vehicles or alternative means of transport when undertaking business trips.

 

“This rate is too generous as it is and many organisations pay more, which actually encourages employees to drive extra miles to subsidise their wages.”