Source · Select Committees · Transport Committee
Recommendation 4
4
Paragraph: 14
Zero fuel duty and vehicle excise duty help motorists to offset the higher purchase price...
Conclusion
Zero fuel duty and vehicle excise duty help motorists to offset the higher purchase price of electric vehicles compared with petrol and diesel alternatives. Those prices are predicted to decrease as sales of new and second-hand electric vehicles increase. As prices decrease, more motorists will purchase electric vehicles, which will in turn decrease fuel duty and vehicle excise duty yields.
Paragraph Reference:
14
Government Response
Acknowledged
HM Government
Acknowledged
As the Government’s Net Zero Strategy set out, as we transition to net zero, the government will need to ensure that the tax system encourages the uptake of EVs, and revenue from motoring taxes will need to keep pace with this change, while remaining affordable for consumers. This is so we can continue to fund the infrastructure and first-class public services that people across the UK expect, and avoid a rise in congestion, with those able to drive electric vehicles having very low running costs compared to other vehicles and public transport. That would affect everyone on the road and those using public transport. Our tax system has already begun to adapt to this transition. As I set out at Autumn Statement 2022, it’s right that all motorists start to pay a fairer tax contribution. That’s why, from 2025, electric cars, vans and motorcycles will pay Vehicle Excise Duty in the same way as petrol and diesel vehicles.