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Chancellor George Osborne is under pressure to make yet another Budget U-turn, following a call by a government advisory body for the reversal of a measure affecting environmentally aware motorists.
The Committee on Climate Change (CCC) has recommended that Mr Osborne abandon his plan to withdraw company car tax relief for electric vehicles from 2015/16, claiming it would not make a notable contribution to the public purse and have mainly adverse affects on a burgeoning industry.
‘This decision will not raise significant revenue, given low sales of electric vehicles. However, it will undermine incentives for purchase of electric vehicles as company cars, a market niche where there is a potentially high share of early adopters,’ claims the CCC in its 2012 progress report to Parliament.
‘Although there were limited purchases of electric vehicles in 2011, conditions are in place to support market development (i.e. government support for purchase of electric vehicles, investment in battery-charging infrastructure, and manufacturers launching new models).
‘The announcement… that the company car tax exemption for zero and ultra-low emission vehicles would be withdrawn in 2015 will limit incentives for uptake in this key sector while raising only very limited revenues, and should be reversed,’ adds the organisation, an independent body established under Climate Change Act 2008 to advise ministers on emissions targets.
Its recommendation follows changes of heart by the chancellor over taxes affecting churches, takeaway food, static caravans and charitable giving – all of which were announced in March’s Budget.
