Allstar has waded into the debate on electric vehicle taxation, urging the Chancellor not to disincentivise EVs yet.

Allstar says the Government should be doing everything possible to get more people using EVs

Paul Holland, managing director for UK/ANZ fleet at parent firm Corpay, responded to calls made earlier this week by Campaign for Better Transport for a pay-per-mile tax on EVs that would plug a budget gap. He’s warned that any such move would impact a sector still at a nascent stage.

The Campaign for Better Transport’s letter to Chancellor Rachel Reeves calls on the Government to reform vehicle taxation as it warns of a massive £5bn revenue gap from the switch to EVs.

The easiest immediate solution, the letter says, would be a simple charge levied on zero-emission vehicles (ZEVs) on a per-mile basis.

Research by the campaign group showed that 65% of the public believe it is fair for ZEV drivers to be taxed but at a lower rate than petrol and diesel drivers, versus only 19% who disagree.

Holland responded by saying now is not the time to be disincentivising switching to electric vehicles – and stressed that the Government should be doing everything possible to get more people using EVs.

“We know that the UK is seriously lacking tax revenue, and the £5bn that could be raised from taxing EVs use could be put to hundreds of uses. However, with climate change of paramount importance, EVs need to be emphasised over traditional ICE vehicles.”

Paul Holland, managing director for UK/ANZ fleet at Corpay

He continued: “As of the end of July, there are currently only 1.2 million fully electric vehicles on the UK’s roads, and we need this number to continue to increase to address a much more material issue in carbon reduction.”

Holland also stressed that fleets running EVs should maximise opportunities for home charging and explore depot charging to reduce reliance on expensive public chargers.

“Although fuel prices have been slowly falling too and will continue to do so for the rest of the year, according to our data, businesses are also dealing with high interest rates and low consumer confidence. Companies are over-stretched and those with fleets need ways to save money, especially if they are going to expand their fleets with new EVs.”

He finished: “Whatever the answer to the taxation challenge, the Government needs to make it clear to businesses and drivers that EVs are the future if the UK is to hit the net zero target.”