www.bvrla.co.uk March/April 2013
The newsletter of the British Vehicle Rental and Leasing Association
A £14bn industry! by John Lewis The car and van sector of the vehicle rental and leasing industry contributes around £14bn a year to the UK economy and supports over 183,000 jobs, according to a new report. Commissioned by the BVRLA from the respected research organisation Oxford Economics, the report provides robust, independent data on the size, scope and importance of the industry.
In the same year, the vehicle rental and leasing industry’s expenditure on foreignmade vehicles containing UK-made engines is estimated to have generated a £349m contribution to GDP, 7,600 jobs and £120m in tax receipts. The vast majority of this business is conducted through motor dealers. In 2011, the sector purchased £11.1bn of foreignmade vehicles from UK dealerships. This activity supported a £98m contribution to GDP, 2,000 jobs and £31m in tax receipts.
The sector’s £14bn contribution is equivalent to £1 in every £90 of UK GDP – or the combined local economies of Bath and Bristol. This figure takes into account the operations of the industry itself, the UK-made vehicles and engines it purchases, the activity of UK dealerships and its impact on the used car market. In the process, the sector generates around £2.8bn of tax revenue a year.
over 183,000 38,000
jobs in the UK
Graphic: DimDom / Shutterstock.com
In terms of jobs, the industry employs 38,000 people directly, while the 138,000 staff it supports in the wider supply chain constitute 1 in every 175 workers in the UK. The UK automotive sector is proudly extolled as one of this country’s few manufacturing success stories. Vehicle rental and leasing companies are among its largest customers, responsible for 15% of total output and a massive 82% of UK vehicles sold to domestic customers. This expenditure is estimated to have supported a £2.4bn contribution to GDP, 52,000 jobs and £810m in tax receipts.
There is also a positive environmental angle to this activity: our industry can rightfully claim to be playing a leading role in driving down emissions. At 123g/km, the CO2 emissions of the average lease car registered in 2012 were 25% lower than the average car on UK roads.
The researchers at Oxford Economics have established that the sector makes a major contribution to the efficiency with which the UK economy works. As well as giving businesses access to modern, fuel-efficient vehicles, fleet management services and lower capital costs, vehicle leasing can also provide a range of ‘housekeeping’ services, including maintenance, insurance and road tax – freeing up resources and working capital for other tasks. It reaches every sector of the economy, from manufacturing and construction to retail and health. This research helps us to dispel the myth that vehicle leasing is predominantly used for tax-efficiency reasons by big business fleets. Two-thirds of the industry’s business customers are SMEs. n
In this issue First-year allowances stance causes dismay The BVRLA vows to fight “discriminatory” treatment of the vehicle rental and leasing industry with regard to first-year allowances. page 2 Gerry Keaney: our new chief executive The next BVRLA head will be an experienced automotive industry insider with 21 years of experience at Volvo page 3 DVLA reacts to fears of tax disc delays The Driver and Vehicle Licensing Agency has addressed concerns about changes to the way tax discs are issued page 3 Big Event wows 900-strong crowd This year’s BVRLA Annual Dinner may well have been the best yet – relive it here (or see what you missed) page 6 Staff must have Driver CPC to move HGVs In future, staff moving HGVs and minibuses will need a Certificate of Professional Competence page 9
— Promoting responsible road transport since 1967 —
Comment BVRLA is dismayed by
Thankfully, the report from Oxford Economics has come up trumps, providing us with some excellent credentials to support our lobbying and PR efforts. Two points that stand out in particular are the hugely important roles our industry plays as a customer for UK-manufactured vehicles and as a provider of finance for cash-strapped SMEs. This is something all our members can be proud of.
Toby Poston Editor Toby Poston, firstname.lastname@example.org 01494 545700 Production Manager Steven Prizeman, email@example.com 01494 545710 Advertising Nora Leggett, firstname.lastname@example.org 01494 545713 © Copyright BVRLA 2013 BVRLA News articles may be used copyright free by members provided that an acknowledgement is given.
BVRLA River Lodge, Badminton Court Amersham Buckinghamshire HP7 0DD T 01494 434747 F 01494 434499 E email@example.com W www.bvrla.co.uk Honorary Life President Freddie Aldous Chairman Neil Cunningham Vice Chairman Peter Cakebread Honorary Treasurer Brian Back Chief Executive John Lewis
‘discriminatory’ Budget decision on allowances
The BVRLA has vowed to continue its campaign against the government’s “discriminatory” treatment of the vehicle rental and leasing industry over 100% firstyear allowances (FYAs). The allowances, which enable a company to offset the total cost of an ultra-low-emission car against its taxable profits, were available to all purchasers until the end of March. However, changes confirmed in the recent Budget mean that leased and rental cars will no longer qualify for FYAs, while purchased vehicles have had their eligibility extended until 2018. Even allowing for reduced fuel costs, low-emission eco-diesel, hybrid and plug-in cars are more expensive than their higher-emitting petrol and diesel counterparts. The BVRLA believes the FYA incentive played an essential role in enabling companies to bridge this cost gap. “Thousands of businesses, particularly SMEs, rely on leasing to acquire their cars, in many cases because they can’t raise the finance elsewhere,” said BVRLA chief executive John Lewis. “This decision to remove 100% firstyear allowances won’t stop them leasing, but it will result in them choosing cheaper cars with higher CO2 emissions.
“In effect, the government is hindering the momentum towards greener motoring. We think overall car emissions in the UK could rise as a result over the next year.” The BVRLA has just published a major independent research project that it believes demonstrates the vital role that the vehicle rental and leasing industry plays in the UK economy, and the environmental implications of removing 100% FYAs (see front page). The association also believes that their removal could breach European Commission guidelines on the application of low carbon incentives. However, there was good news elsewhere in the Budget, with the government agreeing to adopt a more gradual rise in company car tax for drivers of low-emission vehicles. “We are pleased that the government responded to our calls for it to rethink the benefit-in-kind thresholds on low-emission company cars. It will make them a more attractive proposition to drivers, but there is no point doing that if companies don’t offer staff these vehicles in the first place,” said Lewis. n More details of the 2013 Budget, including information on transitional arrangements, can be found on the BVRLA website: www.bvrla.co.uk
Other key Budget measures Capital allowances The threshold for the special pool rate of capital allowances and the introduction of the lease rental restriction was reduced from 160g/km CO2 to 130g/km CO2. This will only apply to vehicles purchased from April 2013.
VED Rates will increase in line with inflation, except for HGVs. HGV rates will be restructured as part of the new HGV Road User Levy Scheme.
Company car tax New emission bands were introduced for company cars emitting 0-50g and 51-75g CO2 per kilometre.
Fuel Duty No change to fuel duty rates until 1 September 2014. (A planned 3p rise was cancelled.) BVRLA News | March/April 2013
Photo: Tupungato / Shutterstock.com
Getting a research company to produce a report on the vehicle rental and leasing sector is a bit like asking a stranger to write your CV. You know that you are going to get something objective and independent, but you may not like or agree with everything it says.
Gerry Keaney: our new chief executive Gerry Keaney has been appointed as the new BVRLA chief executive. He arrives with a tremendous automotive pedigree, having started his career at British Leyland and subsequently spending 21 years at Volvo Cars.
Keaney will take up his appointment on 1 May. The current chief executive, John Lewis, will step down at the end of May after leading the association for 13 years, but will assume a new part-time role as the BVRLA’s director of external affairs.
After spells in a number of senior sales, operations and dealer roles, Keaney was managing director of Volvo Cars UK between 1996 and 2002. He then moved on to a number of international roles at the parent company, culminating with nine years as senior vice president of marketing, sales and customer service.
Cunningham said: “I would like to thank John for the tireless work he has undertaken on behalf of the association and its members. Thanks to his leadership, the BVRLA has more influence than ever and has evolved into a growing, modern trade association that continues to deliver vital information and services to its members.
“We are delighted to welcome Gerry to the UK’s most progressive automotive trade association,” said BVRLA chairman Neil Cunningham. “The vehicle rental and leasing industry continues to lead the way in promoting
Gerry Keaney: the former Volvo man will join the BVRLA on 1 May
safe, sustainable and affordable road transport and we are proud to have attracted a senior executive with such a wealth of experience.”
“I am delighted that he has agreed to stay on and use his knowledge and contacts to help represent the industry’s views in the UK and in Europe.” n
DVLA addresses tax disc fears Association The BVRLA and several of its members met with the Driver and Vehicle Licensing Agency (DVLA) in March to discuss the impact of imminent changes to the way tax discs are issued for newly registered vehicles. At present, vehicle dealers are authorised to issue tax discs to their customers, reconciling the details with local DVLA offices later. But with these local offices set to close in the near future this will no longer be an option. As a result, from 21 July all first-registration discs will come from the DVLA’s Swansea headquarters.
The main change is that a dealer registering a vehicle through the Automated First Registration and Licensing system (AFRL) will need to indicate whether the tax disc should be sent to them, to the registered keeper, or to the fleet operator. Once a vehicle is registered on AFRL, a tax disc will be posted in three to five days. However, the DVLA has agreed that when nine tax discs or more are requested by a dealer they will be posted for next-day delivery.
At the 26 March meeting BVRLA members raised their concerns that these changes should not delay delivery of vehicles to customers.
Dealers will be allowed to register a vehicle 14 days before the official first registration date. There will also be a 14-day period of grace after the date of first registration during which a disc need not be displayed.
“The government is currently giving serious consideration to our call for the tax disc to be abolished, but we must try to avoid any administrative headaches in the meantime,” said BVRLA legal and policy director Jay Parmar.
Feedback from BVRLA members indicated that drivers would be very reluctant to take delivery of a vehicle without a tax disc. The preferred option would be to have discs sent to the dealer so they could be included in the pre-delivery procedure. n
BVRLA News | March/April 2013
works for easier end to private parking disputes The BVRLA is working with the British Parking Association (BPA) to ensure a simpler method for transferring parking charge notices issued for parking on private land. At the moment, many private parking companies require full copies of lease agreements in order to transfer liability for a parking notice from a BVRLA member to the member’s customer. The BPA has now agreed to a solution that will see the lease agreement requested only if a customer disputes that they had responsibility for the vehicle at the time the parking charge notice was issued. This revised procedure is currently being drafted into a memorandum of understanding between the BVRLA and the BPA and should be available following sign-off by both parties in the Summer. n 3
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HMRC agrees to 50% VAT reclaim deal The BVRLA has persuaded HM Revenue & Customs (HMRC) to continue supporting the right of customers to reclaim 50% of the VAT cost of leasing or renting a car.
HMRC approached the BVRLA last Autumn with the aim of reducing the reclaimable VAT to 35% or 40%, on the basis that National Travel Survey (NTS) statistics were pointing to a large increase in private mileage.
and how much private. In the end, the association assembled detailed records for over 100,000 cars. These presented a very different picture from the 417 people surveyed by NTS and actually supported an argument that the VAT reclaim level should increase to 60%. Following lengthy debate, a settlement was reached that will keep the reclaim level at 50%.
Estimating that the introduction of a standard 40% VAT reclaim would cost vehicle rental and leasing customers around £100m a year, the BVRLA decided to obtain its own evidence of how much company car mileage was business-related
“Whilst we have settled on 50% to keep the derogation in place, the BVRLA will be continuing to collect data to help mount a more robust challenge to HMRC when the derogation is next reviewed,” said John Lewis, chief executive of the BVRLA. n
Van modifications: BVRLA achieves approval victory
Want to learn about fair wear and tear for vans?
Since 1995, businesses leasing cars have been able to reclaim 50% of the VAT incurred on the finance element of a rental payment, as long as there is some private use of the vehicle. This was obtained through a ‘derogation’ or exemption from standard European Union VAT legislation, which the UK obtained because it provided a simple, standard way for taxpayers to reclaim VAT and
maintain records. The derogation has to be renewed periodically, something which last happened in 2010.
The BVRLA has been able to provide clarity on the introduction of European Community Whole Vehicle Type Approval (ECWVTA) following its close work with the Vehicle Certification Agency (VCA).
The BVRLA is calling on its van specialists to register their interest in a new fair wear and tear training course for light commercial vehicles (LCVs) set to be launched in Leeds this Summer
From 29 April, light commercial vehicles up to 3.5 tonnes will require approval for any modifications made to them. The VCA is the body charged with granting this approval. Following months of discussions with the VCA, the BVRLA has secured its agreement that the vast majority of simple modifications, such as ply-lining, racking and load restraints, will remain outside the scope of ECWVTA. More complex modifications, such as audio units, glazing and security locks, will be covered by the ‘VCA Enhancement Scheme’, which removes the need for an individual physical vehicle inspection but requires the converter modifying the van to have their processes approved by the VCA. Other modifications might be covered by the enhancement scheme, depending on their impact on the vehicle, eg extra wide or long BVRLA News | March/April 2013
The one-day course, aimed at leasing fleet managers and administrators who regularly discuss the condition of vehicles with customers, will enable participants to:
❱ understand and apply the BVRLA fair wear and tear standard.
Modifications: adding familiar features like roofracks should stay straightforward
roofracks, or changes that restrict the driver’s field of vision. Information on ‘enhanced’ and out of scope modifications, how to determine if your converter is approved by the VCA, and on gaining approval from the VCA, will be included in the BVRLA’s new Guide to Van Type Approval, to be published shortly. n A BVRLA webinar on LCVs and Type Approval will be run on 23 April. See page 11 for full details of this must-see event.
❱ appreciate how the standard
impacts on the vehicle and its re-sale value. ❱ develop effective communications with customers. ❱ carry out internal and external vehicle appraisals, relating findings to the fair wear and tear standard. On completion, participants will receive a certificate of attendance. n To register interest, or for further information, contact member services sales administrator Fran Hampson. Contact Fran Hampson, firstname.lastname@example.org 01494 545703 5
The BVRLA Annual Dinner in March was, perhaps, the association’s most spectacular annual dinner to date. With three pre-dinner receptions, 900 guests, magicians, a casino and virtual motor-racing games – not to mention the Hilton’s fine food – it preserved its status as the social highlight of the rental and leasing year.
The BVRLA always opts for a mixture of wit and wisdom in its dinner speakers, represented this year by the urbane comedian Alun Cochrane and renowned journalist and broadcaster Andrew Neil. 6
BVRLA News | March/April 2013
The Annual Dinner was also an evening of thanks: to the industry’s unsung heroes and high achievers; to BEN, the automotive charity, which does so much for people in need; to the BVRLA’s staff and sponsors who made the event possible; and to outgoing chief executive John Lewis for his 13 years leading the organisation.
Over £11,000 was raised for automotive charity BEN, with one lucky diner (left) winning an iPad in its prize draw.
BVRLA News | March/April 2013
The BVRLA’s Industry Achievement Awards recognised both the highest fliers in its training programmes and also a trio of ‘heroes’ (see page 8)
Industry Achievement Awards 2012 For many years, the BVRLA has been taking the opportunity offered by its Annual Dinner to recognise the efforts of the vehicle rental and leasing industry’s high achievers and unsung heroes. Profiled here are this year’s five exceptional prize-winners, whose efforts in 2012 provided prime examples of going the extra mile and showing the very best of customer service and professional development.
Industry Hero Adrian Binnersley Jolly Good Van Hire
Adrian’s dedication saw him return to work just two months after a serious heart attack in 2011 at the age of 34. However, it is his dedication to customer care that saw him recognised. Last Autumn he made a midnight minibus mission to rescue an elderly couple and their dogs whose airport taxi failed to turn up. A paperwork mix-up meant they couldn’t travel that day, but Adrian repeated the trip later that week to ensure they got away safely. He also refused to take any payment.
Since its inception, over 3,000 individuals have completed the examination and earned the City & Guilds Rental Operator Skills Certificate. The certificate is a benchmark of quality and a very public endorsement of professionalism in daily vehicle rental. In 2012, Stuart achieved the highest mark with an amazing score of 98.6%.
Industry Hero Aman Dogra LeasePlan UK
BVRLA City & Guilds Achievement Award
Stuart Andrew MacDougall Arnold Clark
Aman is a newcomer to the industry who has made a massive impact working with a 4,000-vehicle fleet. As well as resolving a major invoice query and introducing a new purchasing system to prevent the problem occurring again, he has developed an improved script for customer service calls and instigated a new training and mentoring scheme. All this in his first 18 months!
BVRLA Fleet Consultant Programme
Over 100 senior sales staff have now attended this challenging course, accredited by the Institute of Leadership & Management, which helps them gain a greater understanding of the needs of fleet customers.
Laura was top of the class in 2012, obtaining a distinction with her 94.5% pass mark.
Industry Hero Sarah Kennedy County Car and Van Rental 8
Zenith Vehicle Contracts
Sarah joined County Car and Van Rental 13 years ago as a YTS trainee. She has grown with the company, developing her skills and excelling at whatever training she has taken, including her BVRLA City & Guilds exam. Now the manager of her own branch, she has mastered the technical and operational knowledge required to advise customers on cars and commercial vehicles and has also become a dab hand at remarketing ex-rental vehicles.
BVRLA News | March/April 2013
Staff must satisfy Driver CPC to move HGVs The Department for Transport has confirmed that any rental and leasing staff who move minibuses or goods vehicles over 3.5 tonnes gross vehicle weight will need a Driver Certificate of Professional Competence (Driver CPC).
The BVRLA is disappointed that, despite its extensive efforts to explain the needs of the rental and leasing sector, the government has not found a way to exempt its staff from a measure intended for professional drivers in other industries.
Driver CPC applies across all EU member states and aims to maintain high driving standards and improve road safety. The decision will affect staff who collect and deliver vehicles, take them to annual tests and move them between branches.
“We estimated that the costs for the sector in complying with the regulation were in the region of £4.3m per annum,” said BVRLA chief executive John Lewis.
Drivers with a category D on their licence (entitlement to drive minibuses and coaches), will have until 9 September 2013 to complete 35 hours of training. Drivers who already have a category C on their driving licence (which entitles them to drive goods vehicles over 3.5 tonnes gross vehicle weight), have until 9 September 2014. New drivers will not be able to obtain these categories on their driving
HGVs: no Driver CPC, no collections
licence until the Driver CPC training, which includes practical and theory tests, has been completed. A driver who cannot produce a Driver Qualification Card (DQC) at the roadside when asked to do so by VOSA will face a fixed penalty of £30. A driver who commits three such offences may be taken to court, where a maximum penalty of £1,000 could be applied. This would also be the maximum penalty for any subsequent offences.
“At a time when the government is encouraging jobs and growth it is disappointing that it could not recognise that this sector does not carry goods or passengers, therefore the vast majority of this training will be completely wasted.” n Further information can be found in Driver Certificate of Professional Competence (Fact Sheet 578) available from the BVRLA website: www.bvrla.co.uk
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BVRLA Events BVRLA Annual General Meeting Technical and Operational Management Forum Leasing Broker 10th Anniversary Luncheon Residual Value and Remarketing Forum BVRLA Golf Day Technical and Operational Management Forum BVRLA Industry Conference
The Landmark, London
Heritage Motor Centre
Frilford Heath, Abingdon
Heritage Motor Centre
For enquiries about BVRLA forums, seminars, training and conference, and to book places: contact member services sales administrator Fran Hampson: firstname.lastname@example.org, 01494 545703 For enquiries about the BVRLA Annual Dinner and Golf Day, and to book places: contact membership administrator June Dyer: email@example.com, 01494 545714 Full details of all BVRLA events can be found on the association’s website: www.bvrla.co.uk
BVRLA News | March/April 2013
Training & seminars LCVs and Type Approval – a BVRLA webinar
23 April, 2.30pm to 3.30pm From 29 April, light commercial vehicles (up to 3.5 tonnes) will come within the scope of European Community whole vehicle type approval regulations, requiring approval for modifications. Many common ones, such as the addition of towing brackets, will rely on the converter/body-builder having their fitting process approved. This hour-long BVRLA webinar will update members on the regulations and explain how LCV type approval will work in practice for rental and leasing operators. Chaired by Jay Parmar, BVRLA legal and policy director. Speakers: Mike Protheroe, VCA, and Clive Woodward, Bott Ltd.
Asset Management and Risk Control Seminar
23 May, 10am to 3pm Hosted by Blake Lapthorn, Botley, Oxfordshire Key Topic: The changing consumer credit landscape The introduction of the Financial Conduct Authority (FCA) later this year will be accompanied by considerable regulatory change. Our expert speaker William Amos, head of department at the Financial Services Authority, is in charge of overseeing the consultation process that will produce the rules for governing consumer credit. There will be significant changes to how this is regulated and enforced under the FCA, so BVRLA members will hear first-hand how their business is likely to be affected. For further information, and to book places at these events, visit the BVRLA website at www.bvrla.co.uk or contact member services sales administrator Fran Hampson: Fran Hampson, firstname.lastname@example.org 01494 545703 11
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