Motoring expert warns major tax changes needed before electric car switch
24th June 2022

Petrol and diesel prices still continue to increase in the UK.

To save costs on fuel, many drivers will be thinking to switch to an electric car at some point.

But making the change isn't always easy and there are some who said more time is needed to help with the transition.

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Now one expert has opened up about electric cars as the UK has introduced incentives in recent weeks.

The Benefit in Kind (BiK) tax rates changed where it rose from 1% to 2% for fully electric vehicles.

Mark Coulton, at Volkswagen Financial Services UK, highlighted the incentives, but said more needed to be done.

He told "I think the Government has done a lot of good things in encouraging EV adoption (PICG, EVHS, WCG, etc).

"My concern is a lot of these initiatives have now come to an end or have been capped, and there is little clarity around the future.

"Some of it, such as used cars, will of course be driven by market forces."

Some businesses have said it is hard for the future when they don't know if prices will drastically change.

The Society of Motor Manufacturers and Traders (SMMT) said two-thirds of new electric cars were registered to fleets in 2021.

Mark added: "However, taking company cars as an example, the current zero-emission car BIK rate of 2% is only confirmed to 2025.

"Anyone entering into a four-year EV company car or salary sacrifice agreement does not know what tax implications they will face.

"I think there should be more incentives focussed on encouraging EV adoption in the private and retail sector to make it affordable."

Volkswagen said the strong sales performance of electric vehicles during 2021 was notable.

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But it warns that "emerging social and economic challenges" could impact the EV market, particularly in the short term.

Benefit in Kind is usually much higher for petrol and diesel cars.

And the rates on electric cars have been set by the Government at an incredibly low percentage up until 2025.

Recently many have demanded changes to the BiK tax system in the Autumn Budget which is due in October.

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