Fleet operators are unaware of additional Vehicle Excise Duty (VED) charges on electric vehicles (EVs) and plug-in hybrids (PHEVs) due in April, the Association of Fleet Professionals (AFP) has reported.
It comes after increases were announced by the Chancellor of the Exchequer in the Budget last year, and will have an impact on organisations that operate EVs and PHEVs.
Some businesses will see their liability on widely-adopted EVs rise per vehicle from zero to £2,490 over a five year period, it said.
First year VED rates are being increased from zero to £10 for EVs and from zero to £110 for PHEVs emitting between 1-50g/km of CO2. Second year rates for EVs have risen from zero to £195.
Also, EVs that are registered from 1 April will now also become liable for additional rate VED for all vehicles costing more than £40,000, which will be £425 for each of the second to the fifth years of the car’s life.
James Pestell, AFP director, said:
“The feedback we are receiving is that many fleets simply haven’t appreciated and accounted for these increases, which are substantial when applied across entire fleets operating dozens, hundreds or thousands of EVs and PHEVs.
“From April onwards, they’ll be receiving bills from the DVLA or shortfall invoices from their leasing supplier, and won’t have factored them into their running costs. That’s why we are flagging up this issue now.”
“Electric cars costing over £40,000 bought after the start of April – including some of the most common models on fleets – that would have attracted no tax in 2024-25 will be liable for £2,490* during the first five years of their life. That’s a big increase.”
The news comes as Transport + Energy launches its Fleet Electrification Forum this year. Find out more information here.
Image of James Pestell courtesy of AFP
