FUEL duty was frozen again – but much else in the Rachel Reeves Autumn Budget 2024 was aimed at keeping the focus on EVs.
There was news on BIK rules for EVs that sees them increase by two percentage points each year from 2025’s 5% to 9% by 2029-2030.
Elsewhere it looks like the end of PHEVs as a stepping stone to full EVs, both for company car fleets and on salary sacrifice programmes.
Under the new regs revealed yesterday, plug-in hybrids will no longer be rated on distance travelled in EV mode; instead those with emissions of 1-50g/km will incur benefit-in-kind tax at 18% in 2028 and 19% in 2029.
“The government is making it pretty clear that it wants all company car drivers behind the wheel of a zero emissions electric car while paying benefit in kind at the standard rate. Almost anything that resembles a departure from this model has gone.”
New company car tax rates announced in Budget 2024
CO2 (g/km) | Electric range (miles) | 2023/24 (%) | 2024/25 (%) | 2025/26 (%) | 2026/27 (%) | 2027/28 (%) | 2028/29 (%) | 2029/30 (%) |
0 | N/A | 2 | 2 | 3 | 4 | 5 | 7 | 9 |
0-50 | >130 | 2 | 2 | 3 | 4 | 5 | 18 | 19 |
0-50 | 70-129 | 5 | 5 | 6 | 7 | 8 | 18 | 19 |
0-50 | 40-69 | 8 | 8 | 9 | 10 | 11 | 18 | 19 |
0-50 | 30-39 | 12 | 12 | 13 | 14 | 15 | 18 | 19 |
0-50 | <30 | 14 | 14 | 15 | 16 | 17 | 18 | 19 |
51-54 |
| 15 | 15 | 16 | 17 | 18 | 19 | 20 |
55-59 |
| 16 | 16 | 17 | 18 | 19 | 20 | 21 |
60-64 |
| 17 | 17 | 18 | 19 | 20 | 21 | 22 |
65-69 |
| 18 | 18 | 19 | 20 | 21 | 22 | 23 |
70-74 |
| 19 | 19 | 20 | 21 | 21 | 22 | 23 |
75-79 |
| 20 | 20 | 21 | 21 | 21 | 22 | 23 |
80-84 |
| 21 | 21 | 22 | 22 | 22 | 23 | 24 |
85-89 |
| 22 | 22 | 23 | 23 | 23 | 24 | 25 |
90-94 |
| 23 | 23 | 24 | 24 | 24 | 25 | 26 |
95-99 |
| 24 | 24 | 25 | 25 | 25 | 26 | 27 |
100-104 |
| 25 | 25 | 26 | 26 | 26 | 27 | 28 |
105-109 |
| 26 | 26 | 27 | 27 | 27 | 28 | 29 |
110-114 |
| 27 | 27 | 28 | 28 | 28 | 29 | 30 |
115-119 |
| 28 | 28 | 29 | 29 | 29 | 30 | 31 |
120-124 |
| 29 | 29 | 30 | 30 | 30 | 31 | 32 |
125-129 |
| 30 | 30 | 31 | 31 | 31 | 32 | 33 |
130-134 |
| 31 | 31 | 32 | 32 | 32 | 33 | 34 |
135-139 |
| 32 | 32 | 33 | 33 | 33 | 34 | 35 |
140-144 |
| 33 | 33 | 34 | 34 | 34 | 35 | 36 |
145-149 |
| 34 | 34 | 35 | 35 | 35 | 36 | 37 |
150-154 |
| 35 | 35 | 36 | 36 | 36 | 37 | 38 |
155-159 |
| 36 | 36 | 37 | 37 | 37 | 38 | 39 |
160-164 |
| 37 | 37 | 37 | 37 | 37 | 38 | 39 |
165-169 |
| 37 | 37 | 37 | 37 | 37 | 38 | 39 |
170+ |
| 37 | 37 | 37 | 37 | 37 | 38 | 39 |
The classification of double cab pick ups has also been changed: from April 2025 they will be taxed as cars, essentially placing most in the highest tax bracket.
Changes to VED support take up of EVs
First year rates of VED will be charged at £10 for zero emission cars from April 2025. But PHEVs will pay either £110 or £13 depending on emissions, while combustion engined cars will see VED doubled.
The government said it was looking at the Expensive Car Supplement which tends to disproportionately affect EVs. It comes in at £40,000.
Plug-in Van Grant
The government has committed to providing £120 million in 2025-26 to support the purchase of new electric vans via the plug-in vehicle grant – it’s much needed as the transition to eLCVs is woefully behind schedule.
The AFP said it generally welcomed the certainty provided in the Budget, particularly around BIK.
“This is something that we have been requesting for some time because it means that fleets can plan for the future with certainty,” commented Paul Hollick. “While we don’t want to see benefit in kind on electric cars rise to 9% by 2029/30, we’ve accepted for a while that this will have to happen at some point, and the process appears to be being managed by the government in a structured and responsible manner.
“Looking at these new tax tables, the ZEV Mandate, the strengthening of EV favourability under Vehicle Excise Duty, extending 100% first year allowances and more, the government could not be making it clearer across a range of policy that fleets should be looking entirely at zero emissions electric cars. When employers start redrawing choice lists, this should be treated as a central fact.”
Image of Rachel Reeves courtesy of UK Parliament
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Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.
