July 14, 2024

Electric vehicles (EVs) are driving growth in UK company car sales: UHY Hacker Young

The utilization of corporate vehicles in the UK has seen its first increase since 2015, driven by a significant surge in electric vehicles (EVs) provided to employees, as per the latest data from national accountancy group UHY Hacker Young.

Data released by the group shows that the number of corporate vehicles in the UK jumped to 760,000 in the last fiscal year, up from 720,000 the previous year. Notably, the adoption of EVs as corporate vehicles witnessed a remarkable 76% increase, reaching 220,000 vehicles compared to 125,000 in the previous year.

The prevalence of electric vehicles among corporate vehicles also experienced a significant rise, constituting 29% of all corporate vehicles in the 2022/23 period, a stark contrast to just 1% reported in 2018/2019.

Ian McMahon, Partner at UHY Hacker Young, mentioned: “There are significant government incentives for the use of electric vehicles as corporate vehicles. Employees are only required to pay a tax charge on 3% of the value of an electric corporate vehicle per year, compared to up to 37% for traditional vehicles.”

He further stated, “The substantial increase in electric corporate vehicles last year demonstrates that electric vehicles can continue to expand their market share with adequate subsidies.”

Looking forward, McMahon cautioned that the tax charge for electric vehicles will gradually increase by 1% of the vehicle’s value each year until at least 2028, raising concerns about whether the growth of electric vehicles as corporate vehicles might slow down in the upcoming years.

The trend towards electric corporate vehicles highlights a broader shift towards sustainable transportation solutions in the corporate sector, propelled by environmental considerations and financial benefits.

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