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Electric Vehicles: Tax Allowances

Department for Business, Energy and Industrial Strategy written question – answered on 2nd March 2020.

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Photo of Julian Knight Julian Knight Chair, Digital, Culture, Media and Sport Committee

To ask the Secretary of State for Business, Energy and Industrial Strategy, what recent discussions officials in his Department have had with officials in HM Treasury on tax reliefs for electric vehicles.

Photo of Kwasi Kwarteng Kwasi Kwarteng The Minister of State, Department for Business, Energy and Industrial Strategy

Officials in the Department have regular discussions with HM Treasury officials on a range of subjects, including incentivising the uptake of ultra low emission vehicles and associated infrastructure.

The Government is supporting the early market for electric vehicles with demand incentives. Government grants for plug in vehicles continue to be available to help reduce the up-front purchase price of electric vehicles. Drivers of ultra-low emission vehicles also receive other benefits, including lower tax rates, and grants towards the installation of chargepoints. For instance, to accelerate the shift to zero emission cars, all zero emission models will pay no company car tax in 2020-21, 1% in 2021-22 before returning to the planned 2% rate in 2022-23 – a significant tax saving for employees and employers. A number of local authorities also provide additional incentives such as free parking or exemption from the congestion charge. We stated in our Road to Zero strategy that consumer incentives in some form will continue to play a role beyond 2020.

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