Autumn Budget 2024: Benefit-in-kind (BIK) tax rates for electric vehicles will be maintained and the fuel duty freeze will continue for another year.
Delivering the first Labour government budget for 14 years, Chancellor of the Exchequer, Rachel Reeves said that electric vehicle (EV) incentives will be maintained, and the 100% first year allowance for zero-emmission cars and EV chargepoints will be extended for a further year.
EVs are exempt from vehicle excise duty (VED), or road tax, but are liable for a 2% BIK tax rate. This rate will be extended to 2028.
To encourage more people to switch to EVs, the government will widen the differential between VED first year rates for fully electric and other vehicles from April 2025.
The Chancellor also announced a freeze on fuel duty rates for 2025/26, and a 12-month extension to the temporary 5p cut in fuel duty rates until March 2026.
Thom Groot, CEO of The Electric Car Scheme said: “Today’s announcement is a big vote of confidence in the pivotal role that salary sacrifice is having in driving EV uptake. The confirmed extension to low-BIK rates for zero-emission vehicles will make electric cars more attractive in the medium term and provides certainty in the short term for businesses looking to implement electric car schemes.”
