Dear constituent,

Thank you for contacting me about company car tax (CCT) on electric vehicles.

I appreciate the concerns you raise. As you know, the benefit-in-kind provided by zero emissions company cars is currently assessed at a rate of 2%, compared to the rate of 16% that applied in 2019-20 and to rates of from 15-37% for company cars with emissions over 50 grams of carbon dioxide per kilometre. These rates are frozen until 2024-25.

In response to a parliamentary question about the potential impact of benefits-in-kind tax rates from 2025-26 on the adoption of electric vehicles, the Government has said that CCT rates are kept under review, like all taxes, and that it aims to announce CCT rates at least two years ahead of implementation to provide certainty for employers, employees and fleet operators. As it keeps CCT rates under review, I hope the Government gives proper consideration to the issues highlighted by the British Vehicle Rental and Leasing Association. I can assure you that I will continue to monitor this issue.

More widely, I am concerned that steps such as the withdrawal of support for the electric vehicle grant undermine efforts to increase the uptake of electric vehicles and make them more affordable. I believe the Government should be doing all it can to help people to make the transition to electric vehicles and reduce our dependence on fossil fuels. I therefore support calls for an electric vehicle revolution to support Britain’s world class automotive industry, make electric vehicles affordable for working people and roll out charging points to every single community.

Thank you once again for contacting me.

Yours sincerely,

Peter Dowd MP