Chancellor Rishi Sunak’s Spring Statement has provided more clarity for fleets, after delays in the adoption of new company car taxes led to uncertainty in the sector. However, the new rules will mean higher tax bills for some drivers, as Mark Evans, ALD Fleet Consultant, explains: “As expected, the rates proposed in the draft finance bill in 2019 have been adopted. This gives clarity on Benefits-in-Kind for the next three years, although with increases in CO2 under WLTP, many drivers with cars registered from 6 April will experience higher Benefits-in-Kind tax.”
The Budget also contained good news for EV drivers. Zero emission vehicles (ZEVs) will be exempt from the VED ‘expensive car’ supplement from 1 April 2020 until 31 March 2025. This measure is aimed at incentivising the uptake of ZEVs to support the phasing out of petrol and diesel vehicles. ALD Fleet Consultant Sarah Gray comments: “This is really great news. Adopters of EVs which cost over £40,000 were unfairly hit by the £320 standard rate supplement. Removing this for EVs is another step in the right direction to encourage the uptake of EVs and support the road to zero.”
The uptake of EVs has largely been hindered by a perceived lack of charging facilities. To address this, the government has committed to a £500 million investment in the rapid charging network over the next five years, to ensure that drivers are never more than 30 miles from a fast charging station. Sarah Gray sees this as a key step forward for the government: “Whilst we are already seeing a huge number of fast chargers being added to the network, this additional support will provide further comfort for drivers to make the move to EVs which is exactly what is required to improve air quality in the most polluted areas. However, whilst the Plug-in grant has been extended to 2023, it has been reduced by £500 and the no longer applies to vehicles over £50,000. This will mean a number of vehicles that were attractive to fleets, could increase in price considerably.”
Zero emission Light Commercial Vehicles (LCVs) were also given a much-needed boost. From April 2021, the government will apply a nil rate of tax to zero emission vans within van benefit charge, saving businesses an estimated £433 per van in tax in 2021-22. Russ Boulton, ALD’s LCV Consultant, comments: “This is a sensible and much needed approach from the government to further encourage the adoption of EV Vans as it lowers total cost of ownership and coincides with manufacturers releasing a greater amount of electric van models. The approach will also directly impact the electric van driver, further enhancing the proposition to change to an electric van where possible.”
