Got net-zero news, project updates, or product launches to share? Fleets urge govt to keep low BiK and mileage rates for EVs.
The Government is being called upon to clarify its stance on electric company cars ahead of the upcoming Autumn Budget, FleetCheck has highlighted.
FleetCheck has urged Labour not to announce rapid future increases in BiK taxation on company car EVs.
Specialists in fleet software are expressing concerns that fleet taxes and policies concerning electric vehicles (EVs) could potentially be escalated following the Chancellor’s warning of “difficult decisions” in the Budget next month.
Peter Golding, the managing director at FleetCheck, has emphasised the premature assumption by the Chancellor that the fleet EV market is now mature enough to begin reclaiming more revenue.
He has called for the Government to refrain from using the Budget as a platform to announce sudden spikes in Benefit-in-Kind (BiK) taxation on electric company cars.
“Our current BiK tables extend until 2027/28, and the gradual rises they depict aim to support electric car adoption over time,” explained Golding.
“An abrupt increase in future BiK rates could significantly impact the choices being made by company car users today, particularly considering their typical replacement cycles. Such a move may deter the adoption of electric cars, especially at a time when there is already a growing preference towards plug-in hybrids among certain drivers.”
Golding highlighted that apprehensions have heightened following the reduction in the Advisory Electric Rate, used to reimburse electric company car drivers for business travel, effective from September 1.
“The recent cut in the Advisory Electric Rate (AER) is disconcerting, especially amidst the increasing energy price cap,” he added.
“There has been a longstanding argument that AER rates are undervalued, and further reductions like this might dissuade potential electric company car adopters. We earnestly hope that this reduction does not indicate a concerning trend.”
FleetCheck emphasised that while the electrification of company car fleets has progressed rapidly so far, this has primarily been through capturing the ‘low hanging fruit’, implying that the next phase may pose additional challenges.
“Assuming that the rate of progress in fleet car electrification will remain constant would be a miscalculation. Many drivers who have yet to select an electric car may face obstacles such as the absence of a driveway for charger installation, thus lacking convenient access to low-cost charging,” noted Golding.
“To engage these drivers, the Government needs to maintain low BiK rates, align AER rates effectively with electricity prices, and secure adequate funding for on-street charging infrastructure.”
“There needs to be a comprehensive alignment of all factors, and clear signals supporting EV adoption need to be evident for the market to continue responding positively. We strongly anticipate seeing this in motion on October 30.”
The Association of Fleet Professionals (AFP) has echoed this sentiment, urging the Government to adopt a gradual approach towards BiK rates to sustain the widespread electrification of fleets.
Following the formation of the new government, the AFP stated that the announcement of extended company car Benefit-in-Kind (BiK) taxation tables should be a priority to offer insight beyond the tax year 2027/28.
However, similar to FleetCheck’s concerns, the AFP cautioned against substantial increases in BiK rates for EVs, which could hinder adoption as fleets address more challenging scenarios for EV deployment.
Paul Hollick remarked, “We are now navigating through these more intricate scenarios, particularly where drivers lack home or nearby charging facilities, an issue that will persist until on-street charging infrastructure becomes widespread nationwide. For these employees, low Benefit-in-Kind taxation serves as a crucial incentive to offset inconveniences.”
The AFP recently outlined five ‘easy wins’ for Labour, which would incur minimal costs and provide significant benefits for the fleet sector. This includes setting a realistic target for the ICE ban and addressing areas like EV labelling and education, alongside establishing a standardised battery state of health check.
