Car tax changes: Drivers ‘increasingly nervous’ of ‘sudden cliff-edge’ cost increase

Martin Lewis gives money-saving advice on VED car tax

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The BVRLA says an increase in Benefit-in-Kind (BiK) rates within years could “shatter the affordability” of electric cars. They have called for the Chancellor to provide an update on BiK rates in his upcoming Autumn Budget.

Earlier this year, the Government committed to keeping BiK rates low for electric company cars for the near future.

However, they have only confirmed low rates will stand in place until March 2025.

The BVRLA has called for the Government to publish rates beyond this to secure “certainty” for prospective owners.

BVRLA chief executive Gerry Keaney said a “clear roadmap” was needed as soon as possible.

He said: “The Government has made it clear that it is looking to shore-up motoring tax revenues as the shift to zero-emission motoring accelerates.

“As a result, potential BEV adopters are getting increasingly nervous of a sudden cliff-edge increase in BIK rates in 2025/6, which could shatter the affordability of electric cars.

“The Government must provide more certainty by publishing rates for 2025/6 and giving a clear roadmap on how charges could rise in the run-up to the phase-out deadline.”

The BVRLA has also said BiK tax rates should not rise above 10 percent before the 2031/32 tax year.

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They have also pushed the Chancellor to commit to a new electric vehicle BiK escalator which would reduce yearly price increases.

This would restrict from rising by any more than three percent on a year-by-year basis.

BiK rates for pure electric vehicles were slashed from 16 percent to zero percent last year.

Rates rose to just one percent for 2021/22 and will rise to two percent next year.

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