Ahead of today’s Budget speech by Jeremy Hunt, the fleet, motoring and EV sectors outlines their wish lists.

EV charging parity and road pricing foresight

The BVRLA has outlined four key asks of the UK government that will support the nation’s drive to decarbonise.

Following extensive consultation with colleagues, the association has urged the Government to:

• Freeze Vehicle Excise Duty rates
• Remove charging VAT disparity
• Provide foresight on road pricing

Toby Poston, BVRLA director of corporate affairs, said: “Last autumn the Government maintained momentum in fleet decarbonisation by delivering greater certainty on supportive Benefit in Kind tax rates.”

“Now we are asking them to apply the same logic to other elements of the motoring tax regime. Together, these measures would provide a wider boost to business investment in zero-emission vehicles and infrastructure.”

Implement ‘Green Super-Deduction’ with rental and leasing included

Logistics UK’s senior policy manager Denise Beedell

Major UK trade associations, including the BVRLA, have also urged the Chancellor to implement a new Green Super-Deduction to replace the existing programme – and extend it to leasing and short-term hire.

The groups, which also include Logistics UK and Finance & Leasing Association (FLA), say it’s a major flaw of the current scheme that it is not available for leasing or short-term hire, as many firms choose these options because it makes good business sense

And they’ve recommended the Chancellor implement a Green Super-Deduction to replace existing allowances for green plant and machinery, such as the 100% first year allowance (FYA) for electric vehicle charging points and electric vans, and the 50% FYA for plant and machinery which supports a business’s energy efficiency. This would deliver simplicity for businesses, especially SMEs, which may otherwise not use capital allowances.

Logistics UK’s senior policy manager Denise Beedell said: “Logistics businesses are keen to decarbonise their fleets to meet net zero targets, however, they are already facing a 12.6% rise in vehicle operating costs and a potential 23% increase in fuel duty. The creation of the suggested Green Super-Deduction would provide much needed financial support and encourage greater investment in zero-emission technologies.”

Create effective incentives, greater certainty and more fairness

Paul Hollick, chairman, Association of Fleet Professionals

The AFP recently set out its Tax and Regulation Manifesto, detailing where changed is needed to enable businesses to move forward with their fleet and mobility plans faster and more effectively.

Available online, the manifesto sets out 21 points where it thinks the taxation of fleets and mobility needs changing or developing in order to create effective incentives, greater certainty and more fairness.

Chairman Paul Hollick continued: “Most of these points are directly related to the changing shape of the fleet and mobility sectors, specifically the practical issues that we are encountering when it comes to car and van electrification. While we appreciate that the Government has achieved much in this area, there remains a lot more to be done, especially when it comes to light commercial electric vehicles.”

A tougher stance on decarbonisation

David Savage, vice president for UK & Ireland at Geotab

David Savage – vice president, UK & Ireland at Geotab

“We hope to see the Government take a firmer grip on its zero-emission transition ambitions, particularly with plateauing demand for Electric Vehicles (EVs) and Germany’s pushback against the EU’s 2035 ban on Internal Combustion Engine (ICE) vehicles.

“With slowing sales for electric vehicles, the removal and termination of numerous purchasing incentives such as the Plug-In Car Grant (PICG), the introduction of Vehicle Excise Duty (VED) for zero emission vehicles, the expansion of the London ULEZ, and higher VAT for public charging: the switch to electric isn’t as compelling as it once was.

“We previously revealed that over half of light-duty fleet vehicles in Europe could save nearly £218m simply by switching to electric today. However, the UK’s termination of the plug-in car grant last year has demonstrably stifled the economic viability of this transition.

“We hope the Government reflects on this within the context of their 2030 transition target and its wider 2050 net zero ambitions, and reassesses the options available to it to reinvigorate the journey to zero-emission transportation.”

VAT exemption for solar EV chargers

Lee Sutton, co-founder and CEO of Myenergi

Lee Sutton, co-founder and CEO of myenergi

“When the Government introduced zero-rate VAT in 2022 for the installation of certain Energy Saving Materials until 2027, it missed an opportunity to help consumers save more energy and support the adoption of electric vehicles.

“While the policy reduced the cost of solar panels and other technologies for consumers, it made the mistake of classing solar EV chargers as ‘not in scope’, despite them being distinct from standard EV chargers by being able to directly consume the energy generated from the solar supply.

“Compounding this obvious omission, the cost of domestic EV chargers rose significantly at the same time that the zero-rate VAT was introduced for Energy Saving Materials, as the Government’s EV Homecharge Scheme grant of £350 came to an end.

“We’re calling on the Chancellor to redress this increase in the cost of solar EV chargers and their mistaken exemption from list of qualifying Energy Saving Materials by ensuring they also benefit from zero-rate VAT in the Spring Budget.

“Implementing such a change is estimated to reduce the cost of solar EV chargers by approximately £200 on average; this would increase accessibility and encourage more widespread adoption, to the benefit of both consumers and the Government’s decarbonisation agenda.”

Freeze fuel duty and boost on-street charging

Edmund King, president of the AA

Edmund King, AA president

“Our message to the Chancellor is that hiking fuel duty will simply fuel inflation, so it is imperative that he keeps the fuel duty freeze for another year.

“Similarly, on-street EV charging needs a boost. Of the 300,000 publicly available charge points by 2030, almost half of these are earmarked to be on-street solutions, but just 3,900 are currently installed using government grants, rising to 10,000 in the coming years.

“The latest figures show just 189 councils out of 398 across the UK have successfully applied for funding, potentially leaving massive blackspots for the 40% of homeowners without dedicated off-street parking. More help is needed to encourage councils to take up the grants, with equal focus on urban, suburban and rural communities to deliver a fair and accessible charging network.

“To help with skill shortages, we would also like to see mechanics and HGV drivers added to the Government’s shortage occupation list.”

More incentives, not less, for EVs

Alok Dubey, UK country manager of Monta

Alok Dubey, UK country manager of Monta

“Rather than taxing the future, fleet owners and drivers need to be encouraged that switching to electric is easier, cheaper and more reliable in the long-term.

“What we’d like to see from this year’s announcement are more incentives for UK businesses that are looking to support employees and the general public in adopting EVs. The extension of the 100% first-year allowance for companies installing charge points until 2025 was a welcome sight from the 2022 Autumn Statement, but we’d like to see this go one step further with specific grants, incentives, or tax credits for local businesses that want to provide their own EV charge points.

“And, as the installation rate of public chargers continues at snail’s pace, there is a huge opportunity for government to incentivise businesses. Not only will this help widen the UK’s charging network, but businesses that provide their own charging points could earn thousands of pounds in additional revenue per year.”

Keep the 5p duty cut put in place

RAC fuel spokesman Simon Williams

“While we accept the 5p cut introduced last year can’t last forever, with household finances under even more pressure this spring than they were a year ago, we don’t think now is the time to be removing it.

“To decide to raise prices by 5p on both fuels would prove punishing to households and businesses struggling to make ends meet, and may have a detrimental effect on both inflation – which the Government is desperate to bring down – and the wider economy. In the case of diesel, it would also mean the UK has the highest fuel duty rate in the whole of Europe.

“We also hope Mr Hunt isn’t about to become the first Chancellor in 12 years not to cancel the annual planned fuel duty rise. If he were to go ahead with it, untold damage could be caused.”

Address lack of EV charging infrastructure

Alastair Cassels, partner and head of automotive advisory at MHA

Alastair Cassels, partner and head of automotive advisory at MHA

“The Spring Budget is a real opportunity for the Government to help EV manufacturers and current or prospective owners, especially ahead of the 2030 ban on new sales of petrol and diesel cars and the anticipated Zero Emission Vehicle (ZEV) Mandate.

“The Government cannot rely solely on the private sector to provide EV charging infrastructure, which varies markedly across the UK regions. It should play its role in boosting EV charging points by encouraging investment and regulation to ensure fair pricing, better accessibility and minimal service levels. Introducing a VAT reduction on public charging from 20% to 5%, the current domestic price for users, and encouraging fossil fuel companies to invest in charging facilities priced capped below the current per mile of internal combustion engine (ICE) vehicles will make EVs ownership more attractive.

“To remain internationally competitive, the UK needs more domestic battery production. Investments in gigafactories, battery and recycling facilities will enable UK producers to create produce EV products that are more affordable for modest incomes and reduce our reliance on imported Chinese batteries. It is also crucial that UK develops its own domestic batteries and energy storage as the geopolitical battleground for these commodities grows.”

Support used EV market

VRA chairman Philip Nothard

VRA chairman Philip Nothard

“New EVs are largely attractive to company car drivers because of low tax and to businesses because of their low environmental impact. These factors do not apply to private, used buyers.

“A lot of research exists that shows used buyers have a potential disposition towards buying an EV in the future, but evidence so far suggests that they will only do so if the car is the right price and makes sense on a practical level.

“What we believe is needed are incentives that mean when a consumer is faced with the choice of a used diesel or petrol car, or an electric alternative, the latter is sufficiently attractive that the used buyer sees it as viable purchase.”

Axe the EV ‘Pavement Tax’

Campaign group FairCharge has renewed its calls to the Treasury to equalise the VAT rates for public (20%) and home (5%) EV charging so that those unable to charge at home are not unfairly disadvantaged.

Quentin Willson, founder of the campaign, said: “The Chancellor should use the Spring Statement to make a generational commitment to the future of UK electrification to create investment confidence for the industry, increase energy security, and help clean up our urban air. Cutting VAT on public charging is essential. The Treasury is disadvantaging drivers by forcing them to pay four times the rate of VAT simply because they don’t have a driveway. These higher costs are also slowing EV adoption.”