MPs have asked the Chancellor, Philip Hammond, to introduce tax incentives for electric vehicles at the upcoming Budget.
The cross-party group of 42 parliamentarians has countersigned a letter from the chair of the Environment, Food and Rural Affairs Committee, Neil Parish, asking for the planned reduction in company car tax to be brought forward.
At present, the rate of company car tax for electric vehicles (and plug-in hybrids with CO2 emissions of 50 g/km or less) stands at 13 percent, but that is set to rise to 16 percent next year.
Under current plans, the system will change in the 2020/21 financial year, with the company car tax for electric vehicles falling to two percent, while plug-in hybrids and range-extender electric vehicles emitting less than 51g of CO2 per kilometre will be rated between two and 14 percent depending on their electric-only range.
However, the committee’s letter has asked for the reduction to be brought forward by 12 months to April 2019 as part of this month’s Budget announcement.
Parish said: “We are urging the Chancellor to bring forward a planned reduction in company car tax by just one year. Patchwork tax policy is not helping drive consumer behaviour and should be replaced with streamlined legislation to encourage the uptake of electric vehicles. The government cannot tackle the urgent issue of air pollution with the handbrake on.”
The letter follows a similar missive from a group of organisations that included the AA, World Wildlife Fund for Nature (WWF) and the British Vehicle Rental and Leasing Association (BVRLA).
Like the MPs, the 11-strong group pointed out the importance of cleaner vehicles in addressing climate change and air quality, saying that introducing tax incentives earlier would improve uptake.
The letter also follows recommendations from the Business, Energy and Industrial Strategy Select Committee that the ban on the sale of new diesel and petrol cars should be brought forward from 2040 to 2032.
BVRLA chief executive Gerry Keaney said: “Last week the BEIS Select Committee made clear in its report about driving the transition to electric vehicles that time is of the essence if government is serious about the UK leading the transition to zero emission.
“This month’s Budget provides the Chancellor with the perfect opportunity to address the glaring lack of cross-government alignment when it comes to creating a supportive environment to incentive the uptake of electric vehicles.
“The whole automotive industry is speaking with one voice on this, and we are pleased to see that parliamentarians from across all parties are supportive of our calls. We can now only hope that on Budget day, the Chancellor will support our collective voice of reason and take the right steps to create a tax system that incentivises the uptake of zero-emission vehicles, rather than one than prevents progress.”