Chancellor extends tax breaks for zero emission vans

Budget outlines extension of Enhanced Capital Allowance scheme for zero emission vans up to 2018

Tax breaks for zero emissions goods vehicles have been extended under plans unveiled in the Chancellor’s spring Budget under proposals intended to cut energy costs.

Chancellor George Osborne unveiled his Budget on Wednesday (March 21)

Chancellor George Osborne unveiled his Budget on Wednesday (March 21)

Under the government’s Enhanced Capital Allowance (ECA) scheme, businesses are able to claim for the cost of purchasing goods vehicles operating with zero emissions.

The scheme, which had been available from April 2010, had been due to expire in March 2015. However, the Treasury announced on Wednesday (March 2018) that the incentive will be extended until March 2018.

Businesses that do not claim the government’s Plug-In-Van Grant — through which they can claim up to 20% off the cost of an electric van up to a maximum of £8,000 — will not be eligible for the incentive.


Announcing the Budget in Parliament, Chancellor George Osborne, said: “We need to cut our energy costs. We’re going to do this by investing in new sources of energy: new nuclear power, renewables, and a shale gas revolution.

“We’re going to do this by promoting energy efficiency today by tilting the playing field — extending the 2% increase in company car tax in 2017-18 and 2018-19 while increasing the discount for ultra low emission vehicles — and reducing the rate of fuel duty on methanol.”


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