The move means that the CCT bands for cars emitting over 75g/km will increase 2% to a maximum of 37% for both these years.

As a result of the changes, the differentials between the lowest-emitting vehicle bands will narrow but one year later than previously announced. In 2017-18 there will be a 4 percentage point differential between the 0-50 and 51-75 gCO2/km bands and between the 51-75 and 76-94 gCO2/km bands. In 2018-19 this differential will reduce to 3 percentage points. The differential will reduce further to 2 percentage points in 2019-20 in line with the Budget 2013 announcement.

Andrew Hogsden, senior manager, strategic fleet consultancy at Lex Autolease, said of the changes: 'The decision to press ahead with plans to raise BIK rates on electric vehicles to 5% in 2015/16 and 7% in 2016/17 is likely to prove damaging to this fledgling sector.  Fleets are the main purchasers of electric vehicles and the removal of a key financial incentive will make these vehicles less attractive to businesses.'

Ashley Sowerby, managing director, Chevin Fleet Solutions, added: ‘We would expect fleets to become even more keen than in recent years to identify attractive and viable low-CO2 choices for drivers. These are quite big increases and employers will have to work hard to minimise the impact on employee tax bills. However, they the move will, of course, tend to have a positive impact on CO2-related factors such as fuel costs.’