Hidden in all the gloom of the Pre Budget report, there are some positives, we will have to work at them but there are some.
Exempting electric cars from company car tax is the biggest sign yet that electric technology is foremost in the government’s mind when it comes to reducing fleet emissions. The tax treatment of company cars is already based on the CO2 profile of individual models, but this step shows the government is looking at electric vehicles as the next step in this process.
“The changes to capital allowances on electric vans is an interesting move. The principle behind it is laudable, but in practice it’s likely to make very little difference. Because of their low emissions, electric vans wouldn't’t pay any capital allowances in their first year anyway. This seems to be more a statement of commitment to electric vehicles than a genuinely practical step to encourage lower emitting company vehicles.
“The same arguments remain around electric vehicles though. The government needs to work to get a great deal more infrastructure in place before these vehicles are viable on a large scale. The Pre-Budget Report did highlight a scheme started in November this year to invest £30million on an electric vehicle charging infrastructure – an important step and hopefully one that will herald a number of similar initiatives.
“More also needs to be done to understand the technology surrounding the batteries themselves and where the electricity is coming from. Manufacturers have made great strides in improving the individual models, but if companies are to take this technology on board in significant numbers, it will take more than a tax break. Cost needs to be weighed against functionality and practicality.
“None of this is to say that electric vehicles won’t tick a lot of boxes for company fleets at some stage. It’s an incredibly promising area of development, and with the right focus could answer a lot of the questions currently being asked of business transport. At UK Carline & our partners it is certainly an area where we are taking a very serious interest.”