Asked by: Luke Murphy (Labour - Basingstoke)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the introduction of low benefit-in-kind rates for electric vehicles on job creation since 2020-21.
Answered by James Murray - Exchequer Secretary (HM Treasury)
Company cars in the UK are subject to an emissions-based regime, which taxes vehicles based on their list price as well as their CO2 emission level. The Government recognises that this regime plays an important role in the electric vehicle transition.
In July 2019, the Government announced new company car tax rates for the tax years 2020 to 2025, which included generous incentives for electric vehicles. These were legislated for as part of the Finance Act 2020. The Government subsequently announced rates for 2025 to 2028 at Autumn Statement 2022, and rates for 2028 to 2030 at Autumn Budget 2024.
Alongside each fiscal event where the changes were announced, an accompanying Tax Information and Impact Note was published setting out expected economic, equalities and other impacts of the new rates. In each of these notes, the rates were not expected to have any significant macroeconomic impacts, such as impacts on GDP and job creation.
At Budget 2024, the Chancellor announced £2 billion of funding to 2030 to support the zero emissions vehicle manufacturing base and supply chain, recognising the value that the industry delivers for the UK and its ongoing transition.
Asked by: Luke Murphy (Labour - Basingstoke)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of benefit-in-kind rates for electric vehicles on the annual uptake of electric vehicles.
Answered by James Murray - Exchequer Secretary (HM Treasury)
HMRC publishes annual statistics which provide information about the company cars provided as benefits in kind to employees by employers, including the proportion of the company car stock which is electric. The most recent statistics were published in June 2024 for the tax year 2022-23, which showed that 220,000 company cars were fully electric, or 29% of the total company car stock, an increase from 50,000 in 2020-21.
The Government is committed to supporting the transition to electric vehicles, and generous company car tax rates for electric cars have been a key incentive for increasing their number on the road. Electric company cars also play a significant role in supporting the used EV markets. At the end of their lease company cars are sold into the used markets, which is where the majority of car sales take place in the UK. There were 314,000 zero emission cars registered for the first time in 2023, an increase of 18 per cent from 2022.
Asked by: Luke Murphy (Labour - Basingstoke)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the impact of the introduction of low benefit-in-kind rates for electric vehicles on supply chain security since 2020-21.
Answered by James Murray - Exchequer Secretary (HM Treasury)
Company cars in the UK are subject to an emissions-based regime, which taxes vehicles based on their list price as well as their CO2 emission level. The Government recognises that this regime plays an important role in the electric vehicle transition.
In July 2019, the Government announced new company car tax rates for the tax years 2020 to 2025, which included generous incentives for electric vehicles. These were legislated for as part of the Finance Act 2020. The Government subsequently announced rates for 2025 to 2028 at Autumn Statement 2022, and rates for 2028 to 2030 at Autumn Budget 2024.
Alongside each fiscal event where the changes were announced, an accompanying Tax Information and Impact Note was published setting out expected economic, equalities and other impacts of the new rates. In each of these notes, the rates were not expected to have any significant macroeconomic impacts, such as impacts on GDP and job creation.
At Budget 2024, the Chancellor announced £2 billion of funding to 2030 to support the zero emissions vehicle manufacturing base and supply chain, recognising the value that the industry delivers for the UK and its ongoing transition.
Asked by: Luke Murphy (Labour - Basingstoke)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the introduction of low benefit-in-kind rates for electric vehicles on GDP since 2020-21.
Answered by James Murray - Exchequer Secretary (HM Treasury)
Company cars in the UK are subject to an emissions-based regime, which taxes vehicles based on their list price as well as their CO2 emission level. The Government recognises that this regime plays an important role in the electric vehicle transition.
In July 2019, the Government announced new company car tax rates for the tax years 2020 to 2025, which included generous incentives for electric vehicles. These were legislated for as part of the Finance Act 2020. The Government subsequently announced rates for 2025 to 2028 at Autumn Statement 2022, and rates for 2028 to 2030 at Autumn Budget 2024.
Alongside each fiscal event where the changes were announced, an accompanying Tax Information and Impact Note was published setting out expected economic, equalities and other impacts of the new rates. In each of these notes, the rates were not expected to have any significant macroeconomic impacts, such as impacts on GDP and job creation.
At Budget 2024, the Chancellor announced £2 billion of funding to 2030 to support the zero emissions vehicle manufacturing base and supply chain, recognising the value that the industry delivers for the UK and its ongoing transition.
Asked by: Luke Murphy (Labour - Basingstoke)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of bringing forward legislative proposals to allow public sector employees to sacrifice salary to lease an electric vehicle.
Answered by Darren Jones - Chief Secretary to the Treasury
I refer the Honourable Member to the answer I gave to PQ UIN 25529.
Asked by: Luke Murphy (Labour - Basingstoke)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she has plans to (a) implement and (b) allow public sector employees to utilise existing private cycle to work style salary sacrifice schemes to (i) lease and (ii) purchase electric vehicles at reduced rates.
Answered by Darren Jones - Chief Secretary to the Treasury
The transition to electric vehicles (EVs) is crucial to decarbonising transport and will support growth and productivity across the UK. There are now more than 1 million EVs on our roads. The government has committed to phasing out new cars that rely solely on internal combustion engines by 2030, and that from 2035 all new cars and vans sold in the UK will be zero emission.
Salary sacrifice schemes are not generally permitted in the public sector. This is because salary sacrifice arrangements mean employees and employers pay less income tax and National Insurance on remuneration and do not, therefore represent best value for the exchequer and UK taxpayers as a whole.
However, many public sector employees can and do make use of existing schemes that will likely be accessible to all staff, such as Cycle to Work. Employers are also encouraged to consider other options for encouraging the use of zero emission vehicles in their workforce.