No change for EV company car tax rate in Budget causes disappointment

The fleet, motoring and environmental sectors have expressed disappointment that the Autumn Budget included no reference to an early introduction for the 2% company car tax rate for electric vehicles, despite calls for the industry to do so.

BVRLA Chief Executive Gerry Keaney said: “The Chancellor chose to ignore the overwhelming voice of fleets, motoring groups, business organisations, environmental groups and MPs – all of whom were united in calling for this simple tax measure to support the electric vehicle market."

“The Government has missed a golden opportunity to incentivise the most important market for electric cars and is in danger of undermining its own Road to Zero strategy."

The BVRLA’s disappointment was shared by Neil Parish, Chair of the Environment, Food, and Rural Affairs Select Committee, one of dozens of MPs that had supported the association’s call. 

“By not bringing forward the 2% Company Car Tax rate for zero-emitting vehicles by one year the Government has signalled that transitioning to cleaner and greener vehicles is not a priority.

“This is a disappointing decision and will discourage company car drivers from choosing an electric vehicle until April 2020.

Building on the strong cross-party support for this policy, I’ll continue campaigning to change the Government’s mind and will be exploring opportunities to amend the Finance Bill to introduce this.”

The Chancellor has also delayed any announcement until next spring on post 2020/21 changes to company car benefit-in-kind following introduction of the Worldwide harmonised Light vehicles Test Procedure (WLTP) for homologating vehicle emission and MPG data. This has also caused disapointment in the fleet industry.

ACFO chairman John Pryor: “From a fleet decision-maker perspective the Budget Statement was hugely disappointing. It provided no clarity at all on which fleet operators can make any decisions with confidence and leaves company car drivers completely in the dark as to what their benefit-in-kind tax bills will be beyond 2020/21.

“Indeed, for fleet decision-makers and company car drivers the landscape is completely unchanged post-Budget from the pre-Budget scene: lacking clarity and providing no basis for long-term fleet planning and stability.”