The vehicle rental industry has been urged to unite in order to fight the Government over an “unbalanced” method of calculating Vehicle Excise Duty, Meridian Vehicle Solutions has said.

It said the current system of having a first year registration charge “disproportionately affects the rental sector”, adding the rebate system for vehicles that are sold with VED outstanding is also open to question.

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“The daily rental sector performs a crucial role in the economy, supporting businesses, tourists and consumers, while also providing a regular, sustained market for new cars,” said Phil Jerome, managing director of the medium-term rental company.“However, the nature of our business means that a lot of our stock is sold at less than 12 months old, so the initial registration charge, which runs into hundreds of pounds for most mainstream rental cars and can add up to thousands per vehicle, unfairly affects us. The charge is designed to be paid as part of the purchase of a new car that is then retained for some time but, frequently, this is not how the rental industry model works.”

He added: “There is perhaps a tendency in the rental sector to think that VED is a necessary evil that cannot be changed and certainly it is difficult to get governments to alter their views in this kind of area, but we could at least speak with one voice and raise our concerns. Certainly, as more hybrids and EVs make their way onto the market, it is perhaps inevitable that the VED system undergoes further reform in the not-too-distant future, and we should be ready with a coherent view and recommendations.”