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The British Vehicle Rental and Leasing Association has called on the Chancellor, Philip Hammond, to “energise the take up of plug-in electric vehicles and support the vital role played by the company car” ahead of his Budget speech later this month.

It said that current plans for Benefit-in-Kind rates for electric vehicles “actively disincentives the take-up of these cars and contradicts the ambitions set out in its ‘Road to Zero Strategy.”

At present, the BIK rate for EVs is set at 13%, is set to increase to 16% in April and then  drop down to 2% the year after.

The BVRLA said that if the Government were to bring forward the 2% BIK rate for electric vehicles it would help to stimulate the market, which is only growing by less than 4% every year.

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“We welcomed the ‘Road to Zero Strategy’ and our industry responded by issuing its own ‘Plug-in-Pledge’, which would see its electric and plug-in hybrid fleets grow to 720,000 by 2025,” said BVRLA chief executive, Gerry Keaney.“The majority of these vehicles will be company cars and businesses can only deliver this huge move to zero-emission if they have an enabling tax environment. Taxing electric cars at 16% is madness.”

He added: “HMRC’s most recent estimates show a continued fall in the number of company car drivers. More than half of company car drivers say that their vehicle is an essential tool of the job – not having one isn’t an option. Large numbers of people that used to get a company car as a perk or employee benefit are now opting out because of the rising tax cost. They are taking cash instead and the evidence suggests that they are spending this on older and more polluting vehicles.”

Keaney concluded: “It is vitally important that the Chancellor seizes this tremendous opportunity to support the future of the company car by using this month’s Budget to rein in these unhelpful tax hikes.”

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