Sunak pledged to cease the "war on motorists" in his leadership campaign this year. After being described as the "most pro-driver Chancellor in history", one would expect a flood of pro-driver policies, especially with the government's Net Zero plans pushing the UK toward electric vehicles. However, Chancellor Jeremy Hunt announced that all EVs registered after April, 2017 will pay the standard £165 rate of tax each year in his journey to make the system 'fairer'. Company car tax rates will still be lower than ICE vehicles, although this will increase by 1% a year for three years after 2025.
Why is car tax being applied to electric vehicles? Electric vehicles are part of the government's larger-scale plan to reach Net Zero by 2050. Even though EVs are far more sustainable than traditional ICE vehicles, the government cites the wear and tear done to roads, the additional charging infrastructure needed to accommodate the shift to EVs, and congestion caused by cars on the roads, as reasons for the introduction of the tax. Will this stop people from switching to EVs? The disparity between the upfront cost of purchasing an EV versus an ICE vehicle is clear. While electric cars are becoming cheaper, there is still a way to go. Therefore, it comes down to the long-term costs of running an EV to determine whether or not the introduction of car tax will dissuade people from making the switch. The average cost to fill your EV with charge is around £7-15, compared to £60-85 for a petrol or diesel vehicle. Therefore, the additional of £165 car tax each year will be made up relatively quickly due to the cost of charging vs. filling with fuel. How can Charge And Recharge help my business? We offer an unparalleled service in the commercial charging sphere. Our team of expert engineers have installed chargers for office blocks, new build estates, warehouses, factories and more. Get in touch today to discuss your charging requirements!