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Electric Vehicles: Tax Allowances

Question for Department for Business, Energy and Industrial Strategy

UIN 18790, tabled on 21 February 2020

To ask the Secretary of State for Business, Energy and Industrial Strategy, what recent discussions officials in his Department have had with officials in HM Treasury on tax reliefs for electric vehicles.

Answered on

2 March 2020

Officials in the Department have regular discussions with HM Treasury officials on a range of subjects, including incentivising the uptake of ultra low emission vehicles and associated infrastructure.

The Government is supporting the early market for electric vehicles with demand incentives. Government grants for plug in vehicles continue to be available to help reduce the up-front purchase price of electric vehicles. Drivers of ultra-low emission vehicles also receive other benefits, including lower tax rates, and grants towards the installation of chargepoints. For instance, to accelerate the shift to zero emission cars, all zero emission models will pay no company car tax in 2020-21, 1% in 2021-22 before returning to the planned 2% rate in 2022-23 – a significant tax saving for employees and employers. A number of local authorities also provide additional incentives such as free parking or exemption from the congestion charge. We stated in our Road to Zero strategy that consumer incentives in some form will continue to play a role beyond 2020.

Answered by

Department for Business, Energy and Industrial Strategy