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Fleets sound alarm over Chancellor’s EV tax rises – Startin Group

Some fleet operators are warning that it risks stalling progress just as the used EV leasing market begins to mature.

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Startin Group EV pay per mile
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Fleet operators have raised concerns over proposals being considered by Chancellor Rachel Reeves that could add new costs and uncertainty to electric vehicle (EV) adoption, according to Startin Group.

Some fleet operators warned that it risks stalling progress just as the used EV leasing market begins to mature.

Startin Group said enquiries spiked sharply since reports of both measures began circulating, with fleets asking whether they should delay renewals or rethink their EV strategy altogether.

Reeves is reportedly considering a pay-per-mile (ppm) tax for EVs that would charge around 3p per mile, adding roughly £250 a year to the running costs of a typical electric car.

The measure has been positioned as a replacement for lost fuel duty as drivers shift to battery power.

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Salary sacrifice schemes, one of the strongest growth channels for EV uptake, may also face tighter limits in the 26th November Budget.

Any curbs on tax savings would weaken the tools employers have for encouraging drivers to switch to zero-emission vehicles, according to Startin Group

Lee O’Connell, head of group fleet at Startin Group, said: “Businesses are nervous, and they are right to be.

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“These proposals cut straight across the momentum we have all worked hard to build.

“If you tell a driver they could be hit with an extra £250 a year in running costs and possibly lose part of their salary sacrifice advantage, some will question whether switching to electric still makes financial sense.”

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The Association of Fleet Professionals (AFP) stated that such a model risks encouraging some high-mileage drivers to stick with petrol and diesel if the economics turn against them, a point reiterated in its warnings about “unforeseen effects” should blanket per-mile charging arrive too quickly.

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O’Connell added: “Fleets have planned around stable tax policy. Sudden shifts unsettle decision makers, and we are already hearing concern from operators running vans and field teams who fear they will be disproportionately exposed.”

With the Budget now less than a fortnight away, Startin Group said fleets are bracing for decisions that could reshape electrification timelines.

For many, the question is no longer just what the tax system will look like, but whether it will keep pace with the practical realities of fleet transition or undermine it at the very moment it needs stability, Startin Group added.

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