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MP slams EV company car benefit-in-kind tax and calls for change

MP slams EV company car benefit-in-kind tax and calls for change

MPs have called for changes to company car benefit-in-kind tax to incentivise the take-up of electric vehicles as well as reform of Vehicle Excise Duty.

Andrew Selous, vice chairman of the All Party Parliamentary Group on Electric and Autonomous Vehicles, led a House of Commons debate on the uptake of electric vehicles and bicycles.

During the debate Mr Selous and other MPs consistently expressed cross party support for electric vehicles and for the necessary infrastructure and incentivisation support required from government.

Mr Selous also recognised from, among other the British Vehicle Rental and Leasing Association (BVRLA), concerns about the impact current company car benefit-in-kind tax plans will have on electric vehicle take up.

In 2017/18 the rate of tax on zero emission company cars was 9% rising to 13% in 2018/19 and 16% in 2019/20, before reducing to 2% in 2020/21.

He said: “There is a lunatic progression: at the moment, the rate of company car tax for zero-emission vehicles, which is due to rise to 16% before going down to 2%. Let us get it down to 2%; let us signal our intention, not make it worse for the area that we are trying to encourage.”

Separately, Labour MP Alex Sobel called for “a revision of Vehicle Excise Duty rates to better incentivise both new purchases and support the second-hand market”.

Responding to remarks at the close of the debate, Road and Local Transport Minister Jesse Norman said the government would play a vital role in the decarbonisation of UK transport.

Mr Norman said he wanted to position the UK as a world-leader in the development, manufacture and use of zero-emission vehicles and it was his ambition for “almost every car and van to have zero emissions by 2050”.

The BVRLA said it continued to call for the government to revisit its plans for company car tax bandings due over the next few years, which it believed would actually hamper low emission vehicle take up.