Jack Cameron

31 October 2024

Drivers


The contents of the UK 2024 Budget were announced earlier this week. While not all parts of the budget were positive, we were pleased at the governments continued commitment towards EV’s and the great green transition.  

As big proponents of EVs and greener mobility, we were pleased to see the government reference and maintain the tax incentives on electric vehicles, as well as continue to support incentives like the EV Salary Sacrifice Scheme.  

Now that the budget has been fully announced, let’s look at how the contents affect the wider EV industry.  

Electric vehicle incentives

Towards the end of the announcement, Reeves reaffirmed Labour’s commitment to promoting electric vehicle (EV) adoption across the UK. This follows the party’s earlier declaration to advance the ban on the sale of new petrol and diesel vehicles to 2030, moving up from the initial 2035 target set by the previous government.  

Reinforcing this stance, the budget confirmed the extension of existing incentives for EVs, such as lower Benefit in Kind (BiK) rates, through 2030. Although BiK rates for EVs will gradually increase each year up to 2030, they will still be significantly lower than those for internal combustion engine (ICE) engines, with the differential growing over time. This continued support is welcomed by Pike+Bambridge and the businesses that participate in our EV Salary Sacrifice Schemes. 

Starting in April 2025, the gap between fully electric vehicles and other types in terms of first-year Vehicle Excise Duty (VED) rates will widen, with zero emission cars paying the lowest first year rate at £10 until 2029-30.While new EVs will no longer qualify for exemption from road tax after April next year, their VED rates are expected to stay much lower than their internal combustion counterparts, enhancing the appeal of purchasing new EVs.  

This change is projected to contribute an additional £400 million to the economy by the end of the forecast period. 

The budget also confirmed an extension of the plug-in van grant for another year. However, it did not introduce further incentives for the electric van sector, despite industry appeals to boost uptake in this area, where the market share for electric vans stands at 5.1%, falling short of the 10% target for year-end. 

A change in Benefit in Kind rates 

The government has set its BIK (also known as Company Car Tax) rates for 2028/29 and 2029/30, maintaining its commitment to strongly incentivise electric vehicle (EV) adoption. For fully electric vehicles, BIK rates will see a modest rise to 7% in 2028/29 and 9% in 2029/30. In contrast, hybrid vehicle rates will be adjusted to more closely match those for internal combustion engine (ICE) vehicles. Notably, there will be a significant increase for low-emission plug-in hybrid electric vehicles (PHEVs), jumping from 5% to 18% between 2027/28 and 2028/29. This reaffirms the government’s commitment to a transition to full electric vehicles rather than hybrid solutions.  

Additionally, the government confirmed that, from April 2026, Benefit in Kind must be reported via payroll software, covering both income tax and Class 1A National Insurance contributions (NICs). 

CO2 (g/km) Electric range (miles) 2023/24 (%) 2024/25 (%) 2025/26 (%) 2026/27 (%) 2027/28 (%) 2028/29 (%) 2029/30 (%)
0 N/A 2 2 3 4 5 7 9
1 – 50 >130 2 2 3 4 5 18 19
1 – 50 70 – 129 5 5 6 7 8 18 19
1 – 50 40 – 69 8 8 9 10 11 18 19
1 – 50 30 – 39 12 12 13 14 15 18 19
1 – 50 <30 14 14 15 16 17 18 19
51 – 54 15 15 16 17 18 19 20
55 – 59 16 16 17 18 19 20 21
60 – 64 17 17 18 19 20 21 22
65 – 69 18 18 19 20 21 22 23
70 – 74 19 19 20 21 21 22 23
75 – 79 20 20 21 21 21 22 23
80 – 84 21 21 22 22 22 23 24
85 – 89 22 22 23 23 23 24 25
90 – 94 23 23 24 24 24 25 26
95 – 99 24 24 25 25 25 26 27
100 – 104 25 25 26 26 26 27 28
105 – 109 26 26 27 27 27 28 29
110 – 114 27 27 28 28 28 29 30
115 – 119 28 28 29 29 29 30 31
120 – 124 29 29 30 30 30 31 32
125 – 129 30 30 31 31 31 32 33
130 – 134 31 31 32 32 32 33 34
135 – 139 32 32 33 33 33 34 35
140 – 144 33 33 34 34 34 35 36
145 – 149 34 34 35 35 35 36 37
150 – 154 35 35 36 36 36 37 38
155 – 159 36 36 37 37 37 38 39
160 – 164 37 37 37 37 37 38 39
165 – 169 37 37 37 37 37 38 39
170 + 37 37 37 37 37 38 39
BIK tax bands based on CO2 emissions

The fuel duty freeze  

The budget also confirmed that taxes on petrol and diesel will remain unchanged. Fuel duty will stay frozen for another year, alongside the continuation of the 5p per litre duty cut. Without this freeze, an increase in line with the Retail Prices Index would result in a 7p rise per litre of fuel—a move Reeves described as “the wrong choice for working people.” Maintaining this measure is projected to cost the economy £3 billion. 

While the industry will welcome the continued EV incentives mentioned earlier, some have argued that this extended freeze contradicts Labour’s commitment to Net Zero goals. On a positive note, this means petrol and diesel engines remain as viable as they were previously.  

Infrastructure

The government has promised a £200 million investment in 2025-26 to accelerate the rollout of electric vehicle charging infrastructure, including funding to support local authorities to install on-street charge points across England. There are currently over 70,000 public charge points across the UK, and we expect this number to keep rising.  

Our CEO, Piers Bambridge, reacted to the budget: 

“We’ve been pleased to see how tax incentives have supported the transition to a cleaner, greener mobility, and I do hope that the tax rises we see won’t result in the UK taking a step back and what is a crucial part of the transition to net zero.” 

Regarding the wider aspects the budget, we were disappointed to see an increase in National Insurance (NI) contributions paid by employers, rising by 1.2% to 15% by April 2025. Pike and Bambridge are fortunate to support hundreds of businesses and business owners who we see work tirelessly every day and are given very little gratitude and support. Despite this, the continued support of greener transport means we’re looking forward to the future of this industry.  

Please get in touch with our EV experts below if you have any further questions.  

Contact our team

Back to Blog