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Written question asked by Scott Arthur (Labour) on Tuesday, 10 March 2026, in the House of Commons. It was due for an answer on Thursday, 12 March 2026. It was answered by Dan Tomlinson (Labour) on Wednesday, 18 March 2026 on behalf of the Treasury.

Electric Vehicles: Fringe Benefits

Question

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of increases in Benefit-in-Kind rates for electric vehicles on consumer uptake; and whether her Department has considered the effect on adoption rates if Benefit-in-Kind rates exceed 10%.

Answer

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.

Secondary information

Type
Written question
Reference
119671
Session
2024-26
Grouped for answer
Yes
Subjects
Fringe benefits Electric vehicles
Link
View this Written question on www.parliament.uk