Many fleet operators in the UK remain unaware of upcoming increases in Vehicle Excise Duty (VED) charges for electric vehicles (EVs) and plug-in hybrids (PHEVs), set to take effect in April, according to the Association of Fleet Professionals (AFP).
VED increases, announced in last year’s Budget, will affect organisations operating EVs and PHEVs, with some fleet operators seeing tax liabilities rise from zero to £2,490 per vehicle over five years.
First-year VED rates will increase from zero to £10 for EVs and from zero to £110 for PHEVs emitting between 1-50g/km of CO2. EVs will face a more significant increase from the second year onwards, with the annual rate rising from zero to £195.
Additionally, EVs registered from 1 April will be subject to the additional rate VED applied to vehicles costing more than £40,000. This will add £425 per year from the second to the fifth year of ownership.
James Pestell, director at AFP, warned that many fleets have not accounted for these increases:
“The feedback we are receiving is that many fleets simply haven’t appreciated and accounted for these increases, which are substantial when applied across entire fleets operating dozens, hundreds or thousands of EVs and PHEVs,” he said.
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“From April onwards, they’ll be receiving bills from the DVLA or shortfall invoices from their leasing supplier, and won’t have factored them into their running costs. That’s why we are flagging up this issue now.”
The AFP will host a Tax Year End webinar on Tuesday, 4 March, at 10am to provide further guidance. The session will cover VED changes, P11D processes, PHEV benefit-in-kind adjustments, and upcoming CO2 tax revisions. More information is available at www.theafp.co.uk/events/tax-year-end-webinar.
