Alphabet is calling on the government to provide greater clarity over proposed changes to Electric Vehicle Excise Duty (eVED), warning that uncertainty around future taxation is making it more difficult for fleet operators to plan their transition to electric vehicles.
The leasing specialist believes the proposed introduction of eVED, alongside potential changes to Benefit-in-Kind taxation, could increase costs for businesses, create additional administrative burdens and ultimately slow the adoption of electric vehicles across commercial fleets.
Many lower-paid employees use Salary Sacrifice schemes to access electric vehicles, supporting wider fleet decarbonisation while helping to remove older, more polluting vehicles from the road. However, Alphabet warns that proposed tax changes could reduce affordability and limit access to the most cost-effective EVs.
Caroline Sandall-Mansergh, Alphabet’s Consultancy and Channel Development Manager, said:
We believe £15 to £30 will be added to monthly costs by eVED, so harming affordability and choice by potentially removing the cheapest vehicles from Salary Sacrifice schemes. Even small extra monthly costs can push vehicles out of reach, not just increasing prices but eliminating options entirely. The risk is that tax changes will remove this benefit for those it helps most, contradicting the government’s stated equity goals.
Alongside the financial impact, Alphabet believes the proposals would increase the administrative workload for fleet operators, leasing providers and drivers through additional mileage reporting and compliance requirements.
Sandall-Mansergh said:
There’s also going to be an administrative burden that comes with eVED, with mileage tracking through impractical manual odometer checks and reporting to reconcile expenditure. That’s going to increase complexity and costs for both fleet managers and individual drivers…
We know that balancing net-zero goals with budget constraints will remain a difficult challenge for the new Prime Minister, but a change of administration feels like the right time to review what’s been proposed and amend it to prioritise fairness and clarity. The current uncertainty – which has been echoed across the industry – complicates policy design and budget forecasting, risking wasted effort on strategies that may be undermined by changes further down the road. Long-term clarity is what’s needed, and now.
Alphabet also highlighted concerns that, if implemented as proposed, eVED would apply to all electric vehicles, including existing lease agreements, creating mid-contract cost increases for businesses and adding significant administrative complexity for leasing companies. The company warns that these additional costs are likely to be passed through the supply chain, increasing charges for fleet customers and potentially individual drivers.
As an alternative, Alphabet is advocating for a simpler taxation model that embeds EV taxation within charging costs, similar to the way fuel duty operates today. The company believes this would provide a fairer, mileage-based approach while reducing the administrative burden on fleet operators and supporting continued investment in zero-emission transport.
