UK Gives Important Tax Breaks to Electric Cars

UK is taking another big step in supporting electric car sales. In order to encourage companies to opt for electric car fleets, all EVs will receive a five-year tax break from the benefit-in-kind personal taxation, which is currently 9 percent of the value of the vehicle in the case of electric cars.

In the United Kingdom, all employees pay a tax for their company cars based on its cost and its CO2 emissions. EVs were taxed with 9%, while internal combustion cars are taxed from 10 percent to 35 percent. From April 2010, all electric cars will benefit from the tax break.

"To help boost the number of electric cars on our streets, I have decided to exempt them from company car tax for five years," said chancellor Alistair Darling. "And I can also announce a 100 percent first year capital allowance for electric vans."

"2010 is set to be another extremely difficult year for the UK motor industry as increased VAT and first year VED rates directly impact on consumer demand. The opportunity is to take advantage of the transition to low carbon vehicles, with new incentives for company car drivers and van buyers, as well as extra resources for collaborative research and development," SMMT chief executive, Paul Everitt said.

"These new measures will help speed up the mass market adoption of sustainable road transport in Britain," said John Lewis, chief executive of the British Vehicle Rental and Leasing Association.