The chancellor Alistair Darling has confirmed he is giving company drivers of electric cars a five-year holiday from Benefit-in-Kind tax. Other changes to the tax rules were also announced. From April 2010: all electric cars will be exempt from BiK for five years; all electric vans will be exempt from Van Benefit Charge for five years; and a 100% first-year allowance will be provided for the purchase of electric vans. Currently company drivers of electric cars face a 9% BiK bill, which while being the lowest band, still means a 20% tax payer faces a £64 a year BiK charge for a £20,000 electric car. The incentive is designed to get more companies to put electric vehicles on to their fleets. It was announced in today's Pre-Budget Report by the chancellor Alistair Darling and confirms the Government’s intention to encourage the rapid adoption of electric vehicle technology by companies. Earlier this year the Government announced a financial incentive of up to £5,000 off the list price of a new electric car from 2011/12. The latest announcement has been welcomed by the fleet industry. “We are really pleased that the chancellor has listened to our call to modernise the business tax regime and give a clear, long-term incentive for companies willing to be early adopters of electric cars and vans,” said John Lewis chief executive of the BVRLA. “Together with the £2,500 - £5,000 incentive the government is planning to introduce from 2011 for people buying ultra-low carbon cars, these new measures will help speed-up the mass market adoption of sustainable road transport in Britain. "We believe business users will be at the forefront.” Motoring organisations have also added their voice of approval. “The incentive for companies to go electrify their car fleets is to be welcomed as this will help provide a mass market for low-carbon vehicles and encourage a charging infrastructure to be established," said the director of the RAC Foundation Professor Stephen Glaister. Further tax breaks for company electric vehicles were also announced in today's PBR, including the introduction of a 100% Writing Down Allowance for electric vans.

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