Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the effectiveness of salary sacrifice schemes in supporting the uptake of electric vehicles.

At Autumn Budget 2024, the Government announced new Company Car Tax rates for the years 2028-29 and 2029-30, which increase for both electric vehicles (EVs) and petrol/diesel vehicles, while still maintaining generous incentives to support EV take-up.

The Tax Information and Impact Note (TIIN) published alongside Budget set out the expected economic, equalities and other impacts, and highlighted that overall the measure was expected to encourage the take-up of zero emission vehicles.

The Government recognises that the Company Car Tax regime and the salary sacrifice exemption for ultra-low and zero emission vehicles continues to play an important role in the EV transition. The Government needs to balance these incentives against responsible management of public finances to ensure we have sufficient revenue to fund essential public services. A company car is a valuable benefit and therefore needs to be taxed appropriately.