Preparing for motor changes

MHA MacIntyre Hudson

1st April 2020

Money Matters

MHA MacIntyre Hudson

THE petrol and diesel car sales ban has been brought forward to 2035 - but will the government aim for an even shorter timeline?

We heard recently that the ban on selling new petrol, diesel or hybrid cars in the UK will be brought forward from 2040 to 2035 at the latest, under government plans.

Announcing the change Boris Johnson said that 2020 would be a 'defining year of climate action' for the planet and went on to say that the ban on selling new petrol and diesel cars would likely come even earlier than 2035.

In addition, hybrid vehicles are also now being included in the new proposals, even though they were not included in the original announcement in July 2017.

People will only be able to buy electric or hydrogen cars and vans once the ban comes into effect. Whilst the change in plans will be subject to a consultation, it is highly likely to be adopted.

Steve Freeman, National Head of Motor at MHA MacIntyre Hudson, who are already working with OEMs, Dealer Groups and Fleet Businesses on EV Readiness planning said: "This announcement shows the Government's commitment to banning the internal combustion engine (ICE) in new cars as soon as they can. The current ambition is 2035, but we expect this to move again and possibly closer to 2030, as the Government aims to not just be in the middle of the pack, but become one of the leaders in these reforms and action to tackle both climate change and air pollution.

"To support this transition however, we believe that the government needs to develop a raft of tax incentives for both consumers, manufacturers and dealers over the period to 2035 to both incentivise consumers to purchase EV's and to fully support the UK Automotive sector."

"OEMs, dealer groups and fleet decision makers will need to now consider how this ban will impact them and how they can plan for this transition away from ICE vehicles, redefine their commercial models and manage their energy procurement and infrastructure to support the change and keep the focus on delivering the best customer journey."

Nigel Morris, Tax Director at MHA MacIntyre Hudson, who advises fleet decision makers and leasing providers on car policy added: "The combination of tax changes from April 2020 for Ultra Low Emission Vehicles (ULEVs), including full electric vehicles, and increasing emphasis on the environment, social responsibility and cost control presents an ideal opportunity to look again at salary sacrifice, which can be an extremely innovative employee benefit. Being able to utilise tax and NIC savings and a very low benefit in kind charge enables employees and fleet decision makers to absorb the potentially higher procurement costs of a ULEV or full electric car to be cost neutral or even save money. There is a real opportunity for business and fleet decision makers to support drivers to opt back in to company cars, save cost and help the environment, providing any arrangement is properly designed, implemented and compliant"

James Beverley, Partner at leading Energy consulting firm Baringa Partners added: "We are really pleased the government is making this effort to promote and support the transition to electric, decarbonise transport and stimulate investment into the UK auto sector. We mustn't forget, however, that the wider ecosystem needs to work together to make the transition a success. There is still a lot to do to get the charging infrastructure in the right places, the energy infrastructure upgraded, the supply chain aligned, and of course to change the public mindset."

If you are an OEM, Dealer Group or Fleet decision maker and would like to know more about how MHA MacIntyre Hudson's EV readiness plans are helping others and could help you, go to https://www.macintyrehudson.co.uk/sectors/motor

MHA MacIntyre Hudson