Tom Evennett, EY UK&I Family Enterprise Leader, comments on the Chancellor’s announcement on Electric Vehicles:
“Electric car owners, those considering purchasing an electric car and those considering taking out electric car leases through a company car scheme may need to recalculate the cost of owing these vehicles as the Chancellor announced that, from April 2025, electric cars will be subject to Vehicle Excise Duty. The benefit in kind rates will also increase for electric company cars from the same date (at an additional 1% per year to 2027/28). This change may be required to help to support the Government's finances (anticipated to raise over £1.8bn in 2027/8) but raise the question as to whether this will deter petrol heads from going electric.
“It is notable that the Chancellor chose to act in this area, but not address the “elephant in the room”, being the fact that once cars shift to electric the government will be left without the fuel duties that currently amount to £30bn per annum. This points to the fact that today’s announcement may be only the start of the changes that will beset the electric vehicle market as the country transitions away from fossil fuels.”