Car insurance: Electric cars could receive tax breaks

Wednesday, 09 December 2009

Tax rates for electric company cars will be cut from nine per cent to five per cent in 2012, according to reports, customers of cheap car insurance may be interested to know.

Today's (December 9th) pre-Budget report is likely to suggest the new rate, which represents a sizeable saving compared to the maximum rate of 35 per cent for the most-polluting petrol or diesel-powered cars.

With Chancellor Alistair Darling keen to increase the number of electric cars used by company drivers, employers will also receive a number of incentives to switch to electric vehicles.

For example, National Insurance contributions on company cars paid by employers will be reduced by£480 per car per year.
At present, only 50 of the 1.1 million company cars in Britain are electric.

However, a motorist driving an electric car already pays no road tax, no congestion charges and no fuel tax because no petrol is used.

The new tax rates will coincide with the launch of the Nissan Leaf - the world's first mass produced electric car - as well as four models from Renault.

Posted by Noel Martin

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