Alphabet calls for vehicle tax clarity to support EV adoption

Alphabet (GB) is urging the UK’s next Prime Minister, Andy Burnham, to prioritise fairness, simplicity and long-term certainty when considering future vehicle taxation, warning that proposed changes could undermine electric vehicle adoption and increase costs for businesses.

The fleet and mobility provider says uncertainty surrounding the proposed Electric Vehicle Excise Duty (eVED), alongside the prospect of future changes to Benefit-in-Kind (BiK) taxation, is making it more difficult for organisations to plan budgets and fleet policies while potentially reducing the affordability of electric vehicles.

She said the additional costs associated with eVED could put many vehicles beyond the reach of those who benefit most from the schemes.

“We believe £15 to £30 will be added to monthly costs by eVED, so harming affordability and choice by potentially removing the cheapest vehicles from Salary Sacrifice schemes. Even small extra monthly costs can push vehicles out of reach, not just increasing prices but eliminating options entirely. The risk is that tax changes will remove this benefit for those it helps most, contradicting the government’s stated equity goals.”

Alphabet argues that salary sacrifice schemes play an important role in helping employees switch from older, higher-emission vehicles to electric alternatives, but many participants choose vehicles based on strict affordability limits linked to minimum wage thresholds.

The company also warned that the proposed eVED regime would create a significant administrative burden for fleets, requiring manual mileage and odometer reporting to reconcile vehicle tax expenditure.

Sandall-Mansergh said: “There’s also going to be an administrative burden that comes with eVED, with mileage tracking through impractical manual odometer checks and reporting to reconcile expenditure. That’s going to increase complexity and costs for both fleet managers and individual drivers.

“We know that balancing net-zero goals with budget constraints will remain a difficult challenge for the new Prime Minister, but a change of administration feels like the right time to review what’s been proposed and amend it to prioritise fairness and clarity. The current uncertainty – which has been echoed across the industry – complicates policy design and budget forecasting, risking wasted effort on strategies that may be undermined by changes further down the road. Long-term clarity is what’s needed, and now.”

Alphabet noted that, if introduced in its current form, eVED would apply not only to new electric vehicles but also to existing leased EVs, creating mid-contract changes for customers and leasing providers.

The company said this would generate additional administration and unbudgeted costs for leasing businesses, with any increase in operating costs ultimately likely to be reflected in customer charges. Businesses would then need to decide whether to absorb those costs or pass them on to individual drivers.

As an alternative, Alphabet is calling for a simpler approach to EV taxation, suggesting that tax could instead be incorporated into EV charging costs in a similar way to fuel duty, ensuring drivers contribute in proportion to the mileage they travel while reducing administrative complexity for fleets.