Milly StandingThe Chancellor Rachel Reeves announced that she is considering a pay-per-mile tax for electric vehicles (EVs), which may also affect EV salary sacrifice schemes, according to Startin Group.
EV salary sacrifice schemes could face tighter limits, with any curbs on tax savings weakening the tools employers have for encouraging drivers to switch to zero-emission vehicles.
The pay-per-mile tax for EVs would charge around 3p per mile, adding roughly £250 a year to the running costs of a typical electric car.
The measure is being positioned as a replacement for lost fuel duty as drivers shift to battery power.
Lee O’Connell, head of group fleet at Startin Group, said: “Businesses are nervous, and they are right to be.
“These proposals cut straight across the momentum we have all worked hard to build. If you tell a driver they could be hit with an extra £250 a year in running costs and possibly lose part of their salary sacrifice advantage, some will question whether switching to electric still makes financial sense.”
