Chancellor’s Budget reveals changing costs for EV owners

Commenting on changes to electric vehicles and car fleets announced in the Budget, Simon Down, automotive tax director at Deloitte, said:  

“The EV mileage charge, due to come into effect in April 2028, will mean an increase in the running costs of electric vehicles, albeit not a significant impact on consumer finances. Based on an average annual mileage of 7,100, the charge would cost Battery Electric Vehicle (BEV) drivers c.£213, and Plug-In Hybrid Electric Vehicle (PHEV) drivers c.£107 per year respectively. An increase of c.£213 per year would equate to a c.2% increase in the overall cost of funding a typical fleet car.

“The proposed changes to the threshold for the Expensive Car Supplement (ECS) for vehicle excise duty in 2025 will see the threshold rise to £50,000 from £40,000. This can save drivers £440 per year and applies from years two to five of ownership. Over a typical four-year lease, this will save consumers £1,320. 

“When combined, if a consumer’s EV is valued below £40,000, or over £50,000, they will see a small cost increase from April 2028. However, if the EV costs between £40,000 and £50,000, this Budget means the consumer may be c.£900 better off over the four-year lease, saving £1,320 in ECS but paying an extra £426 in EV mileage charges.”

Note to editors

Deloitte spokespeople

Deloitte has a range of spokespeople available to comment on today’s Budget. They can be reached on 02920 927541 or one of the following numbers: 

• Ian Stewart – chief economist (+44 7785 682226) 
• Amanda Tickel – head of tax and trade policy (+44 7774 337581) 
• Rachel McEleney – personal tax (+44 7826 952940) 
• Alison Lobb – corporate tax (+44 7887 629107)
• James Caldecourt – trade and tariffs (+44 7774 337581) 
• Michael Nicolaides – employment tax (+44 7586 511104) 
• Simon Down – automotive (+44 7824 895798)
• Helen Kaye – hospitality (+44 7824 895798)
• Sophie Brown – retail (+44 7824 895798)
• Andrew Clarke – VAT (+44 7586 511104)
• Philip Parnell – business rates (+44 7990 434703) 
• Ed Roddis – public sector (+44 7855 399368)
• Toby Price – stamp duty (+44 7990 434703)
• James Clare – carried interest (+44 7586 511104) 

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