AFP Renews EV Benefit-In-Kind Call

Date: 10th August 2021

AFP Renews EV Benefit-In-Kind Call, saying Tax Table absence is already affecting Fleet Decisions

The Association of Fleet Professionals (AFP) has renewed its call for the Government to make benefit-in-kind taxation tables for electric vehicles (EVs) available through to the end of the decade.

The industry body points out that currently information has only been published up until 2024-25, leaving businesses and employees now entering into four year cycles with no indication of what the benefit-in-kind rate will be for 2025-26.

Paul Hollick, chair, said that the AFP had been hoping to see further information on future benefit-in-kind from the Government’s recent transportation “greenprint” but had been frustrated by the lack of detail.

He explained: “We’ve been banging the drum about this for some time, that to make the Government’s 2030 electrification deadline workable, we need to have corresponding benefit-in-kind tables in order to strategise effectively. Many fleets, including AFP members, have long-term plans in place predicated on meeting that date but it is clear we need a stable and predictable taxation environment in order to do so.”

Paul said that the AFP were realistic about the future of benefit-in-kind and recognised that the rates applied to EVs would probably have been increased at some point in time but wanted to see this done in a transparent and graduated manner.

“As EVs become the dominant power in company cars, which we expect to happen around the middle of this decade, the government could reasonably move to reduce the incentives attached to them or look to other sources of taxation in order to maintain revenue. That makes sense but it needs to be done in a planned and responsible manner.

“Right now, many drivers are returning to company cars and choosing an EV, or taking one through salary sacrifice, in large part because of the minimal taxation they pay. This benefits them financially but also helps the government decarbonise road transport. It is an incentive-and-result approach that is built on trust.

“What we very much want to avoid is a potential situation where the Treasury of the time suddenly realise that the company car parc is perhaps 60% EV at some point in the mid-late 2020s, and push up benefit-in-kind substantially. That would be unfair on individual drivers, we believe, and also threaten the responsible, committed long-term electrification plans that many, many fleets are pursuing, including our members. The current, four year cycle issue is the leading edge of a potential problem that is only going to get bigger.

“We would like to repeat our request to the Government to look at this issue in the short-term. Introducing benefit-in-kind tables up to 2030 would probably be the single best thing, no-cost action that they could undertake to aid EV take-up by fleets.”