Motorists demand urgent new car tax changes to ensure 'no road users are left behind'
The BVRLA says a car tax roadmap is vital for EV uptake
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One of the biggest motoring organisations in the UK is urging the Government to make vehicle tax rules clear to ensure drivers can stay on the road.
The British Vehicle Rental and Leasing Association (BVRLA) is calling for the creation of a transport tax road map to help accelerate the uptake of electric cars.
It argues that this should confirm the future of Vehicle Excise Duty (VED), fuel duty and benefit-in-kind tax (BiK) rates.
The BVRLA, which represents over 1,000 companies in the motoring industry, states that long foresight is key for drivers, businesses and fleet operators to ensure they can transition to electric.
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The Government has already confirmed that electric vehicle owners will be required to pay VED from 2025, with all zero emission vehicles currently being exempt from the annual tax.
Despite this, the sector is calling for clarity on the rate that electric vehicles will have to pay in BiK tax, often referred to as company car tax.
Based on the current frozen BiK rates, owners of electric vehicles through their companies will pay two per cent tax, with it rising to three per cent in the 2025/26 tax year and increasing by one per cent per year until 2028.
In comparison, petrol and diesel company cars and vans which produce more than 170g of CO2 per kilometre have a staggering 37 per cent tax placed on them.
The BVRLA is now demanding that the Government publish rates beyond 2028 to give people and businesses the confidence to invest in an electric car, knowing they will pay very low rates of tax.
The Future of Fleets Manifesto states: “The industry would like the Government to create a fair, clearly signposted long-term transport tax road map that sets out how the core transport taxes will evolve with the growth of ZEVs.”
It hailed the BiK tax system as a “world-beater”, saying the UK was setting the path to decarbonise transport.
Speaking at the Future of Fleets Manifesto address at the association’s Parliamentary Reception, Toby Poston, director of corporate affairs for the BVRLA, made the call to MPs, BVRLA members and stakeholders.
Addressing guests, he said: “With a general election on the horizon, our voice needs to be heard now to influence the transport policies of tomorrow.
“Our Future of Fleets Manifesto outlines the pathways to a successful transition and where the Government should be playing an active role.
“Greater certainty around tax and regulation will provide the clarity that fleets need to carry on investing in the transition.
“By focusing on the key pain points we can unleash a new wave of zero emission transport use cases. With more fairness we will ensure that no road users are left behind.”
Since low BiK rates were introduced in 2020 and 2021, the uptake of electric vehicles has soared, while the number of petrol and diesel company cars has dwindled.
Around 53 per cent of new company cars are zero emission vehicles, while a staggering 92 per cent of those are on salary sacrifice schemes.
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EVs attract a two per cent BiK tax rate
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The Manifesto concluded, saying: “Road pricing could allow the reform of our current, cumbersome tax structure into a single simple but powerful regime.”