Introduction Electrically powered cars
6.Paragraph 7 is a simplification measure. It reduces the appropriate percentage in one step instead of two for electrically propelled cars first registered in or after 1998. The percentage set out in section 140(3) of ITEPA is amended from 15 per cent to 9 per cent. The appropriate percentage for these cars is currently 15 per cent but this is subject to a reduction of 6 per cent by regulation 4 of the Income Tax (Car Benefits) (Reduction of Value of Appropriate Percentage) Regulations 2001 (SI 2001/1123). The combination gives a net appropriate percentage of 9 per cent (15 per cent - 6 per cent). Regulation 4 will be revoked by secondary legislation before April 2011 to leave the net appropriate percentage for electric cars at its current value of 9 per cent.
7.Paragraph 8 makes a consequential amendment to section 142 of ITEPA, which covers cars registered before 1998. Sub-paragraph 8(a) removes the appropriate percentage for electrically propelled cars and substitutes a figure of 32 per cent for all other cars that are not within section 142(2) of ITEPA. The removal of the appropriate percentage for electrically propelled cars registered before 1998 reflects the fact that no such vehicles exist. Sub-paragraph 8(b) omits subsection 4 of section 142 of ITEPA, which defines electrically propelled cars, because this subsection is no longer required.