Alphabet GB has urged the Government to consider how zero-emission vehicles will be taxed, as part of any plans to reform UK road taxation in tomorrow’s Budget.

Caroline Sandall-Mansergh, consultancy and channel development manager at the business mobility and fleet management services firm, believes the Budget is an opportunity for the Chancellor to, at the very least, signal that the Treasury is considering the full taxable cost of running an EV.

She fears that without addressing the Benefit-in-Kind (BIK) calculation process for zero-emission vehicles at the same time as revising road taxation, company car drivers could be left in the dark about future electric vehicle costs.

She commented: “Unfortunately, experience tells us that, historically, governments have been slow to consult on policy change, sometimes to the detriment of consumers. Data shows that zero-emission vehicles uptake continues to grow but, as with any new experience, many first-time EV drivers are likely to be approaching it with some degree of apprehension. This government therefore owes it to company car drivers to be as clear and transparent as possible when it comes to future zero-emission vehicle policy.”

In the case of company car BiK, confirmed changes extend to the 2029/30 tax year, when zero-emission vehicles will be charged at 9%. Combustion engine vehicles will be capped at 39%. With the ban on pure petrol and diesel car sales set to come into force in 2030, it’s expected that a revised approach to calculating BIK will be implemented for the 2030/31 tax year.

Sandall-Mansergh believes that, with a general election due before the end of the decade, ministers may not prioritise all elements of the zero-emission vehicle transition.

She elaborated: “The risk is that the Treasury is so focused on the ‘here and now’, particularly in light of budgetary challenges, that they won’t give the necessary attention to revising the tax on company cars until much later in the decade. For current and future zero-emission company car drivers, it creates a situation where they’re expected to commit to the switch without fully understanding what the personal cost may be later down the line.”

Sandall-Mansergh added: “This week’s Budget is an opportunity for the Chancellor to, at the very least, signal that the Treasury is considering the full taxable cost of running an EV, including the necessary reform to the BiK structure.”

To avoid the impact of last-minute decision making, Alphabet is calling on the Government to reach out to leasing providers and fleets to begin the consultation as soon as possible.

Sandall-Mansergh expects the legislators to settle on a system of taxation that promotes fairness and the principles of low-emission manufacturing. Well-to-wheel emissions, which analyse the environmental impact and greenhouse gas emissions of a vehicle, are likely to play a big part in the revised system.

Sandall-Mansergh believes that, regardless of the agreed approach, the Government needs to work with the industry to help shape the changes.

“In doing so, it will create a workable, lasting solution that is fair to all parties, while minimising cost and disruption,” she finished.