Having spent some time at the Fleet Management Live show over the last 2 days and seen the focus on electric vehicles I was wondering on the impact that the new tax rules would have?

The Government currently receives ~£2bn p.a. in company car tax and Class1A NIC. This is expected to grow to ~£3bn by 2019/20 given the (hefty?) increases in CO2 benefit in kind percentages (assuming employees remain in cars – a big assumption). With the lower tax rates for ULEVs from 2020/21 this could mean that HMRC income is slashed. If 50% of cars switched to a good ranged hybrid vehicle (unlikely? Perhaps. Impossible? No), HMRC would lose in excess of £1billion in their annual income (In an extreme view, if ALL company cars moved to hybrid/ full electric then the annual income could be as low as £0.2bn). Whilst this may be unlikely, it does stick a question in my mind – how long will HMRC keep the reduced rates for ULEVs …?