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Budget to make e-cars better for business?

Company EV tax rules changed

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Leccy Tech Chancellor Alistair Darling’s pre-Budget report has revealed that electric vehicles will be exempt from company car tax fees for five years starting in 2010.

The news has gone down well with e-car manufacturers, a spokesman for Vauxhall - doubtless with an eye on all those plug-in Amperas it now hopes to flog to travelling salespeople – saying the company “really welcomes” the incentive.

Darling’s report also revealed the introduction of a 100 per cent first-year capital allowance for electric vans, meaning fleet operators can write down the purchase price of a leccy van for their first year of ownership.

“We have campaigned very hard for 100 per cent capital allowances, so are delighted with the announcement,” a spokesperson at e-van maker Smith EV told Register Hardware.

So much for the carrot, but there is also a money-raising stick. The CO2 emission threshold that allows some cars to benefit from a lower ten per cent car tax rate has also been reduced from 120g/km to 99g/km.

The re-jigged emissions regime is expected to raise around £120m ($195m/€132m) per annum for government coffers.

Toyota will be happy because its Prius makes it under the new limit. Honda’s Insight, however, does not.

Darling’s pre-Budget vehicle announcement has no impact on the Government's existing plans to offer incentives and rebates of up to £5000 ($8136/€5538) to private leccy car buyers from 2011. ®

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