Low company car tax ‘best way’ to reach net zero, MPs told

A campaign to persuade the Government to keep benefit-in-kind (BIK) tax rates low for electric company cars took its case to Parliament, last week.

The #SeeTheBenefit campaign, organised by the British Vehicle Rental and Leasing Association (BVRLA), gave MPs a salary sacrifice briefing.

More than 30 MPs from across the political spectrum came to share their views on the electric vehicle (EV) market and find out more about the key role played by company car tax.

The campaign is calling for the Chancellor to support the uptake of electric cars in the Autumn Budget by giving tax foresight beyond the current 2024/25 cut off and keeping BIK tax rates lower for longer.

The BVRLA says that this is particularly important for the burgeoning salary sacrifice market where BVRLA members are helping thousands of basic rate taxpayers access a new battery electric vehicle for the first time.

The event in Westminster saw active MPs examine affordable EVs and speak with salary sacrifice experts from the BVRLA, Octopus Electric Vehicles, Tusker, and Zenith.

BVRLA director of corporate affairs, Toby Poston, explained: “The UK currently has a world-leading policy that is democratising access to EVs. Low company car tax rates have been the single biggest driver of EV uptake to date.

“With over 70% of petrol or diesel company car drivers due to renew within the next two years, keeping EV BK rates low is the best way for the UK to meet its net zero targets.”

Poston said the BVRLA was delighted that so many MPs came to the briefing, signed its pledge car and agreed to support its campaign for more BIK foresight and effective long-term incentives.

Through June, the BVRLA encouraged industry professionals to write to their local MP to share the campaign and invite them to the drive-by event.

More than 1,000 letters were shared, leading to the strong attendance seen last week and giving the campaign a strong base to build on as the expected Autumn Budget approaches.

Poston concluded: “As we weather the cost-of-living crisis, drivers need to know what their tax bills will be.

“The Government needs to keep up the fragile momentum it has created in the face of the current economic headwinds, now is not the time to accelerate tax rises.”

The Association of the Fleet Professionals (AFP) previously told Fleet News it is worried that the recent scrapping of the plug-in car grant scheme could signal a move away from favourable benefit-in-kind (BIK) rates for electric vehicles (EVs). 

The grant’s removal, it says, suggests that the Government believes the EV market has now reached a point where it can operate with fewer or even no measures designed to speed and support adoption.

Full details of the BVRLA campaign and ways to get involved can be found on the BVRLA website.