The United Kingdom announced on Wednesday plans to encourage the purchase of eco-friendly vehicles, explaining that companies will not have to pay taxes on the acquisition of such vehicles for five years after purchase.
The aim of the zero tax rate is to promote mass production of electric cars and their rapid acceptance by the general public. Currently, there are only 50 registered electric vehicles in the fleets of British companies out of a total of 1.1 million. The announcement of the zero tax rate for the acquisition of electric vehicles was included by British Finance Minister Alastair Darling in the pre-budget report. As part of the incentives for low carbon emissions transport, the acquisition of all light transport vehicles powered by electricity will be exempt from the obligation to pay capital tax in the first five years.
Companies currently pay a tax of nine percent for the acquisition of electric vehicles, or between 10 and 35 percent for vehicles powered by fossil fuels. "The government is considering reducing the tax rate for the purchase of electric vehicles from nine to zero percent starting in 2012," said an unnamed source in the British government. John Lewis, the CEO of the British Vehicle Rental and Leasing Association, told British media that the new measures will help accelerate the transition to sustainable road transport in the UK. (H)
