Today’s Budget should be used as an opportunity to re-examine the impact of Vehicle Excise Duty on rental companies and other businesses that keep new vehicles for less than a year, says Meridian Vehicle Solutions.
Phil Jerome, managing director at the medium-term rental specialist, said that the current inability to obtain a full refund on any outstanding balance from the first VED payment at registration could add hundreds of pounds per vehicle to running costs.
He explained, “The refund received is based on whichever is the lower of the initial registration payment or the rate for the standard, ongoing charge. The latter is usually much lower than the first, so there is often a substantial disparity.
“There appears to be no particular reasoning behind this rule and it effectively adds an additional VED levy on rental companies like ourselves, as well as franchised dealer groups and car manufacturers, that keep most of their cars for less than 12 months.
“We don’t believe that this is in any way an intentional move but was introduced alongside the current VED regime and has certainly had an impact on the costs that we and the rest of the rental industry face.
“It seems to us that it would be fairer to introduce a VED refund scheme that simply returned everything that had been paid on a pro rata basis – and this is something that the industry should be urging the new Chancellor to review.”