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Government urged to address ‘irrational’ fleet tax policy

Advantageous company car tax rates on ULEVs should be introduced in this autumn’s Budget for the next tax year, not 2020, to help drive EV sales.

EV Charging

Fleet Evolution has added to calls for the Government to bring forward plug-in company car tax incentives

So says Fleet Evolution, echoing a call from Fleet World for a more joined-up government ULEV strategy in the publication’s new campaign to save the company car.

Launched earlier this week, the Fleet World campaign says the UK’s vital company car sector needs urgent action from Government to avoid irreparable damage, including on more logical company car tax bands. These are currently set to see a full EV face a 16% BiK band by 2019/20, before falling to 2% the year after, leading to concerns that we are unlikely to see fleets adopting policies weighted towards ULEVs in the immediate future.

The BVRLA has also highlighted this week that the industry needs a more supportive tax regime as it pledges that its members will rapidly increase their plug-in vehicle take-up to support the UK’s Road to Zero Strategy.

Now, fleet management and salary sacrifice specialist Fleet Evolution, which was awarded Go Ultra Low Company status last November for its commitment to boost uptake of plug-in vehicles, has also said that the Government’s ‘misguided and confused’ company car taxation policy is deterring would-be buyers.

Managing director Andrew Leech said: “When you combine rising taxes with the comparatively high list price of electric cars, which is measured before the impact of any government grant for company car tax purposes, it doesn’t make financial sense to choose an electric car in 2018/19 rather than a petrol or diesel equivalent.”

However, Leech said the Government had it within its power at the Budget Statement this autumn to reverse its policy and give a boost to the electric car market.

“We would like to see the Government remove the contradiction of an aggressively escalating company car tax followed by a huge reduction in the tax rate, by introducing the 2% rate from the 2019 tax year and thus actively promoting the uptake of longer-range EVs much sooner,” he added.

The Fleet World ‘Save the Company Car’ campaign also calls for Advisory Fuel Rates for ULEVs to be implemented now – which could also help drive ULEV take-up according to ACFO, which continues to urge HMRC – and urges the Government to provide advance notice of Benefit-in-Kind bands, as it highlights that fleets need these at least four years in advance to avoid unexpected tax burdens later on.

The campaign also urges the Government to provide tax adjustments for NEDC Correlated figures, not to over-tax diesel engine, and to set out a national air quality framework.

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.