Within minutes of Chancellor Jeremy Hunt announcing a raft of new tax measures on both businesses and private citizens, a number of motor industry trade bodies posted their reactions.
Sue Robinson, Chief Executive of the Nation Franchised Dealers Association said a new ‘showroom tax’ on electric vehicles as well as the introduction of VED for this type of car from 2025 could put buyers off from choosing an electric car.
“As a whole, the Autumn budget announced today promises growth and investment that the UK so desperately needs. Whilst there are positive notions in areas such as business rates and infrastructure investment, NFDA is concerned that the removal of tax exemption for EV owners could set back the objective of electrification and increasing the number of electric vehicles sold in the UK, in a bid to reach the ever-challenging 2030 targets,” she said.
Mike Hawes, SMMT Chief Executive also condemned the decision to tax EV owners, “We recognise that all vehicle owners should pay their fair share of tax, however, the measures announced today mean electric car and van buyers – and current owners – will face a significant uplift in VED. The sting in the tail is the VED supplement which will unduly penalise these new, more expensive vehicle technologies. The introduction of taxes should support road transport decarbonisation, and the delivery of net zero, rather than threaten both the new and second-hand EV markets,” he said.
“With a ZEV mandate on the way for car and van manufacturers, we need a framework that encourages consumers and businesses to buy electric vehicles. We look forward to working with government on how to transition the market and ensure the tax framework on road users supports this objective.”
Nick Zapolski from aggregator ChooseMyCar.com had a similar sentiment: “While our research suggests people are interested in EV ownership, it’s undeniable that the high purchase price of new EVs – and the lack of second hand ones on the market – mean it’s out of reach for many drivers. Any new tax on them will just exacerbate this situation – and could be seen as an indication that other benefits of EV ownership are under threat”.
Robinson welcomed the decision to scrap a so-called ‘online sales tax’ which would have put a further levy on cars sold through the internet.
“The Online Sales Tax threatened franchised dealers with the possibility of being taxed for their click and collect sales, a prominent feature in present and future operations. NFDA is pleased to hear that our lobbying efforts were successful, the government has decided to scrap the proposed OST. We urged the government not to introduce this complex tax which would disproportionately impact brick and mortar businesses,” she said.
See our other update on the subject of the Minimum Wage rise and Business Rates cut.