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.

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.