UK: More tax breaks for electric cars considered

By just-auto.com editorial team | 8 December 2009

The UK's finance minister Alistair Darling is considering slashing the benefit-in-kind personal taxation on company-owned electric cars in a bid to stimulate the market for electric vehicles.

The measures could be announced in tomorrow's pre-budget report. Businesses currently pay National Insurance contributions and employees pay income tax, based on the cost of company cars and its CO2 emissions.

The range varies from 9 per cent for electric cars to between 10 and 35 per cent for fossil fuel consuming cars.

Such a tax cut would coincide with the planned introduction of an electric car subsidy in 2012, which would see up to GBP5,000 taken off the cost of a new electric car.

"The government is thinking about reducing the rate for electric cars from 9% to zero from 2012," a source told Reuters.

A report in The Independent newspaper says that the tax on electric cars will be reduced from 9 per cent to 5 per cent.