Chancellor Alistair Darling has announced plans to increase the number of electric cars on the streets by exempting them from company car tax for five years.
In his pre-Budget report, he also announced a 100% first year capital allowance for electric vans.
Darling said the plans were a key component of the government’s growth strategy of investing to keep goods and people moving.
He also confirmed that as of April 2012 the 10% band for company car tax will apply to vehicles emitting 99g/km or under, with tax rising in increments of 1% per 5g of CO2. †As expected, this update in taxation will continue to encourage manufacturers to develop lower emission vehicles.
Mike Moore, a director in the employment taxes group at Deloitte, commented: “This should provide a further incentive for employers to assess their current fleet policy and its true after tax cost and ensure they maximise the use of the tax incentives provided by the government.”