Clarity needed on BIK rates for Electric Vehicles
Electric Vehicles (EVs) benefit from low company car tax rates. This means that despite electric cars being more expensive than petrol or diesel options drivers are able to make the transition.
This benefit is not just open to business users though, through salary sacrifice arrangements an ever-growing number of employees can access EVs at affordable monthly costs.
Brand new, safe and zero-emission pure electric cars are in reach for more people than ever before.
Over 60 per cent of salary sacrifice drivers are 20 per cent taxpayers, the tax approach is democratising the transition to net zero. In time, as these vehicles feed the second-hand market, the democratisation will gain further momentum so that electric vehicles will be available to all drivers.
Instrumental in this policy success has been the foresight provided by the government on future tax rates, but we are now in a position where rates are only known up to 2024/25. Beyond this the government’s intentions aren’t clear.
The BVRLA is calling on the government to provide as much foresight on future rates as possible and to keep the tax on electric vehicles down to continue this massive success story.
KeyFleet managing director Marc McLoughlin said: "Some continued long-term clarity on company car tax rates for EVs is essential for us to ensure we don't lose the momentum on the road to electrification and net zero."