Government confirms electric car boost
The government has unveiled the full details of new policies to support the rollout of low emission vehicles in businesses, including workplace charging grants and tax benefits.
The new schemes were set out in broad terms in the 2016 Autumn Statement as part of a £390 million investment in ultra-low emission vehicles (ULEVs), low emission fuels and driverless cars.
The government will use £80 million of this fund to provide grants through the new Workplace Charging Scheme.
Launched on 21 November, the voucher-based scheme offers companies up to £300 per charging socket installed, up to a maximum of 20 per site.
In addition to the grants, the government has also put a new tax break in place for companies installing chargepoints with immediate effect.
As part of the government’s Finance Bill 2017, businesses can now benefit from a 100 per cent first-year tax allowance on electric chargepoint equipment, meaning that the costs can be written off against taxable profits. The allowance runs from 23 November 2016 to 31 March 2019.
The measure complements the existing 100 per cent first-year allowance for eligible low emission cars.
Following public consultation, a new company car tax band for zero-emission vehicles will also be introduced from 2020-21 to encourage the uptake of cars able to travel long distances on electricity only.
For cars with emissions below 50g CO2/km, the tax rate will be based on the electric range of the car and range from 2 per cent to 14 per cent. For emissions above this level the tax rate increases steadily, reaching 37 per cent for cars emitting 160g CO2/km or more.
In a further move to increase the tax benefits of investing in low emission transport, salary sacrifice schemes for low emission cars will be untouched from a government decision to remove tax and national insurance benefits from other benefit-in-kind schemes.
Poppy Welch, head of the government’s Go Ultra Low initiative, said: “The £80 million investment in charging infrastructure is vital as growth in the UK electric car market continues to accelerate.
“This is fantastic news for motorists and the continuation of incentives for plug-in vehicles through company tax and salary sacrifice schemes will give thousands more people the option of choosing the very lowest emitting cars and allow more businesses to benefit from adding electric vehicles to their fleets.”
Research government-backed research found that nearly 70 per cent of company car drivers would use an electric vehicle if they were given the opportunity by their employer.
Posted under Carbon Reduction, Fuel Efficiency and Environmental Regulations and Legislation on 13 December 2016