The UK government has provided a holiday gift to commercial fleet owners in the form of an electric vehicle tax break.
Labour Party member and chancellor of the exchequer Alistair Darling included the proposal in his pre-budget report to Prime Minister Gordon Brown this week. According to the web site electric.co.uk, the government will exempt electric vehicles (EVs) from a company car tax. The break, which includes electric vans, will remain in effect for five years, the site said.
Another major incentive for fleet owners is a plan to allow a company to write off the purchase price of the vehicle against a corporate tax for the year.
“To help boost the number of electric cars on our streets, I have decided to exempt them from company car tax for five years. And I can also announce a 100% first year capital allowance for electric vans,” Darling said in making the announcement, according to a Frost & Sullivan report on the issue.
The report said this move shows the UK government’s leadership in the push for electric vehicles and that other countries across Europe may soon follow suit.
“Frost & Sullivan believe these measures are only a beginning, and governments across the [European Union] will need to make a concerted effort in terms of incentives, research initiatives and infrastructure projects, to drive the demand for EVs and consequently, impact the CO2 emissions from road transportation,” the report said.
In November, the UK government launched a program called “plugged in places,” which supports the building of charging infrastructure in up to six cities across the UK, in addition to offering subsidiaries for vehicle purchases.
“It is a positive sign to see that the chancellor’s announcement includes support for infrastructure, without which the range of EVs would be very limited, and hence impacting their demand,” said Frost & Sullivan’s growth consulting director Edward Gibbs.
A recent Voice of the Consumer survey by Frost shows that 80% of consumers believe government incentives are important to them and more than 65% of businesses in the UK, France and Germany said they would not consider the purchase of elective vehicles without an incentive.
“Although this announcement is a landmark in the UK, its actions should be put in context by understanding other incentives being launched across Europe,” the report said. “For example, Germany has announced that there will be no taxes for a period of five years from the date of registration for EVs, and Denmark has scrapped an import tax of EVs which will help boost their market.”