Darling reveals electric tax break

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The Chancellor has announced that company car tax will not apply to electric vehicles for five years in his Pre Budget Report this afternoon.

There would be a 100% first year capital allowance for electric vans.

The director of the RAC Foundation Professor Stephen Glaister said: "The incentive for companies to go electrify their car fleets is to be welcomed as this will help provide a mass market for low-carbon vehicles and encourage a charging infrastructure to be established."

Motorists' relief that no more fuel duty rises were announced today will be short lived. VAT will return to 17.5% on January 1st and that means the current price of a litre of unleaded petrol will go up by 2.5p.

And all this is before the 1p above inflation rise already planned for April, and speculation of a further VAT increase after the election."

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