Website of the UK government

Support for low-carbon transport

The Pre-Budget Report announces further support for electric vehicles, to help stimulate the markets for electric cars and vans.

From April 2010:

• electric cars will be exempt from Company Car Tax for a period of five years
• electric vans will be exempt from Van Benefit Charge for five years
• a 100 per cent first-year allowance will be provided for the purchase of electric vans, subject to confirming compatibility with State aid rules

£30 million in funding will also be provided to support the development of low-carbon transport, including through an expansion of the Technology Strategy Board’s ultra-low carbon vehicles competition.

• Buying and driving greener cars (environment and greener living section)

Company Car Tax

From 2012, the CO2 emissions thresholds for Company Car Tax (CCT) bands will be shifted down by 5 grams of CO2 per kilometre.

The graduated table of CCT bands will be extended downwards to a new 10 per cent band for cars emitting up to 99 grams of CO2 per kilometre, in place of the existing 10 per cent band.

• Tax on company benefits (money, tax and benefits section)

Fuel Benefit Charge

To encourage fuel-efficient travel, the fuel benefit charge multiplier will increase from £16,900 to £18,000 from 6 April 2010.

Fuel duties

Following the announcement in Budget 2008 that the 20 pence per litre duty differential for biofuel would cease in 2010-11, the duty differential for biofuels will stop from 1 April 2010.

Vehicle excise duty (VED)

From 1 April 2010, VED rates for motorbikes in 2010-11 will increase by £4 in the highest band, and by £2 in the second highest band.

VED rates for motorbikes in the lower two bands will be frozen.

VED for Motorcycles: 2010-11 rates

VED band	Change from 2009-10 to 2010-11	2010-11 rate
Up to 150cc	-	£15
151-400cc	-	£33
401-600cc	+ £2	£50
Over 600cc	+ £4	£70

• The cost of vehicle tax (motoring section)