BVRLA welcomes government’s ‘green light’ for ULEV salary sacrifice schemes

Uptake of Ultra Low Emission Vehicles (ULEVs) is at an all-time high, and the British Vehicle Rental and Leasing Association (BVRLA) has welcomed salary sacrifice changes that aim to boost the market for these cars within the fleet sector.

Last month, the chancellor announced a shake-up of advantageous salary schemes, meaning that from April 2017 a vehicle must produce less than 75g/km of CO2 to qualify for the tax benefit.

Ultra low emission vehicles outside Houses of Parliament.

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The association has previously warned that any changes to salary sacrifice could prove to be a “dangerous compromise”, but it now seems content that the government is doing its utmost to protect salary sacrifice vehicle schemes and develop the emerging ULEV market.

This could be something to do with the fact that changes to salary sacrifice schemes were not as extreme as previously expected. In fact, salary sacrifice provider Tusker has actually seen an increase in enquiries since the Autumn Statement.

Gerry Keaney, BVRLA chief executive, said: “It is great to see that the government now has a more comprehensive strategy on ultra-low emission vehicles, which recognises the huge role played by the fleet sector.”

ULEVs will not only benefit from salary sacrifice exemption, but from 2021 will get cheaper company car taxation too.

The Autumn Statement also brought news that company car tax bandings for ULEVs from April 2020 will be changed. By dropping the tax rate from the current 16% to just 2%, the average company car tax bill could drop by around £70 per month, as well as encouraging ULEV uptake in the fleet sector.

Keaney commented: “ULEVs will continue to receive the full savings and advantages of these and other car benefit schemes and we expect the demand for this kind of car to surge thanks to the government support provided via the Plug-in-Car Grant and tax incentives for workplace charging.”

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