The Autumn Budget is likely to prompt widespread rewriting of company car choice lists to refocus on fully electric cars.

Paul Hollick, chair of the AFP

The Association of Fleet Professionals (AFP) said the moves made by the Chancellor mean that the viability of plug-in hybrids (PHEVs) would now be placed under serious questioning by many fleets.

Anecdotal feedback also suggests leasing companies are already seeing drivers wanting to cancel existing PHEV orders and switch to EVs instead.

Paul Hollick, chair at the AFP, said the moves made on PHEVs had largely removed any grey areas.

“The Government is making it pretty clear that it wants all company car drivers behind the wheel of a zero emissions electric car while paying Benefit-in-Kind at the standard rate. Almost anything that resembles a departure from this model has gone.”

Hollick added that it could be argued that this provides a high degree of clarity for fleets but does also mean that some drivers and employers are facing some big bills unless action is taken.

He added that the higher Bik rates for PHEVs were likely to lead to widespread redrawing of choice lists with a renewed emphasis on EVs.

The Budget clearly looked to dissuade use of PHEVs as for company cars, with a jump from a typical 5% today to 18% in 2028/29.

Hollick said: “Drivers who have recently taken on a PHEV on a four-year cycle will see their tax rise massively in its last year and no doubt many of them will head into work this morning to talk to their employer about the possibility of getting out of that car earlier.”

The AFP generally welcomed the certainty provided in the Budget of having Benefit-in-Kind tax tables provided through to the end of the decade, Hollick went on to say.

“This is something that we have been requesting for some time because it means that fleets can plan for the future with certainty. While we don’t want to see Benefit-in-Kind on electric cars rise to 9% by 2029/30, we’ve accepted for a while that this will have to happen at some point, and the process appears to be being managed by the Government in a structured and responsible manner.”

And Hollick said that the new tax tables, combined with the ZEV mandate, the strengthening of EV favourability under Vehicle Excise Duty, extending 100% first year allowances and more, meant that the Government could not make it clearer that fleets should be looking entirely at zero emissions electric cars.

“When employers start redrawing choice lists, this should be treated as a central fact.”