Electric cars: ‘Abolish benefit-in-kind tax for users’

Changes to the benefit-in-kind tax payable by users of company cars would “transform overnight” the amount of electric vehicles (EV) in use in Ireland.

The electric vehicle industry said the answer to low take-up of EVs as they are known, is to “remove or adjust” benefit-in-kind.

At the same time the Irish Electric Vehicle Owners Association has said the Government must not lose sight of the key “strategic aim”to reduce carbon emissions and pollution, which could cost the State hundreds of millions of euro in fines for missed EU climate change targets.

Both comments came as the Government’s Low Emissions Vehicles Task Force meets for the first time on Wednesday.

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The task force, jointly chaired by the departments of Transport and Climate Change was asked to look at measures that would stimulate sales of electric vehicles - currently below 2,000 in number - well short of the latest, reduced target of 50,000 vehicles by 2020.

The initial target announced in 2010 was to have 10 per cent of all vehicles - some including 250,000 cars – powered by electricity by 2020.

Minister for Climate Change Denis Naughten said additional incentives the committee might consider would be to allow EV drivers to use bus lanes or to park for free in towns and cities, while being exempt from toll charges.

However, Brian Purcell of Nissan Ireland said he believed the first and most effective incentive would be changes to the State’s benefit-in-kind tax rate.

Benefit-in-kind applies to drivers of company vehicles such as sales reps who have the vehicle for personal use, and are so taxed on that benefit.

Mr Purcell said, however, that in recent years corporate Ireland has moved away from company vehicles to paying employees an allowance to use their own car, leading to older, more polluting cars on the roads.

However, Mr Purcell said if battery electric vehicles were incentivised with the removal or reduction of the tax, sales would “be transformed”.

The Irish Electric Vehicle Owners Association said it was concerned there would be an attempt to charge for electricity at public charging points. It said any attempt to monetise the investment in charge points on the back of a fleet of less than 2,000 vehicles would be a huge disincentive.

Dave Mc Cabe, who wrote a submission on the charging network for a recent Commission for Energy Regulation public consultation process, said: “The point in the investment is to decarbonise transport”.

He said the strategic aim must be remembered as “a small-engined diesel car which does about four litres to 100 kilometres could actually be cheaper than an electric car”, if pay-for-charging was introduced.

“Electric cars are not faster than ordinary cars, they don’t go further, they are not more comfortable, and they are not revolutionary. If you want people to switch to zero emissions vehicles - and the Government will face fines unless there is an attempt to decarbonise transport – there has to be incentives” he said.