Home » Experts demand urgent car tax cut for thousands of motorists in new ‘incentive’

Experts demand urgent car tax cut for thousands of motorists in new ‘incentive’

Motoring experts have demanded immediate car tax cuts for electric vehicle owners with “no financial incentives” in place to encourage road users to make the switch.

Specialists at DriveElectric have called on Rishi Sunak to “change policy” on consumer incentives or reduce taxes to get more drivers to make the transition.

It’s a stark contrast to businesses and employees who enjoy “significant incentives” for getting their hands on an electric car.

Those securing a car through salary sacrifice programmes can make vast tax savings as part of benefit-in-kind schemes.

DriveElectric said: “There are significant incentives for company employees to switch to EVs, such as very low benefit in kind (BIK) tax rates (two percent until April 2025, then rising by one percent each year to five percent in April 2028).

“These low BIK rates have fuelled the increasing popularity of salary sacrifice, which can reduce the monthly cost of driving an EV by up to 40 percent for the employees of an organisation.

“And EVs are made even more attractive by having much lower running costs than petrol and diesel vehicles. However there are currently no financial incentives for private car buyers to switch to an EV.

“So unless the government changes its policy on consumer purchase incentives or reduces taxes in the run-up to a general election, or there’s a new Government with a more pro-EV policy, sales of new EVs are likely to continue to be mainly to businesses and fleets.”

The Plug-in Car Grant scheme did provide considerable funds to motorists who opted for an electric vehicle.

However, this was gradually reduced until the scheme was scrapped completely back in June 2022.

Meanwhile, EV owners will pay Vehicle Excise Duty (VED) rates for the first time from 2025 despite previously being exempt.

With most EVs at a considerable cost, most new owners are likely to be liable for the Expensive Car Supplement (ECS) for models over £40,000 for five years.

Data from the Society of Motor Manufacturers and Traders (SMMT) showed a decline in fully-electric car sales in December.

Volumes fell by a staggering 34.2 percent in December with 27,841 new EVs, this is down from 42,285 cars in December 2022.

Meanwhile, fleet and business registrations soared with over 96,008 new cars registered.

This equates to a whopping 68 percent market share compared to just 43,000 private new car sales in the same period.

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