By GREG HEFFER, POLITICAL CORRESPONDENT
Rachel Reeves is looking to hammer electric vehicle (EV) drivers with extra tax - at the same time as boosting subsidies for Brits to buy non-petrol cars, it has emerged.
Ahead of her Budget next month, the Chancellor is said to be drawing up several proposals to hike taxes on EVs to ensure all drivers pay their fair share.
This could include levies on the weight of a car, or a pay-per-mile scheme.
But, at the same time, the Treasury is also reported to be considering making it cheaper for Britons to buy and run EVs.
There are said to be concerns within Whitehall that hiking taxes for EV drivers will harm Labour's Net Zero drive by putting people off making the switch from petrol or diesel cars.
According to The i Paper, the Treasury is considering an increase in the existing grants on offer to motorists to buy a new EV.
Brits can currently get up to £3,750 off certain EV models, such as the Ford E-Tourneo Courier.
Officials are also said to be looking at cutting or even equalising VAT costs on charging motorists without a driveway, and scrapping business rates for charging infrastructure.
Rachel Reeves is looking to hammer electric vehicle (EV) drivers with extra tax - at the same time as boosting subsidies for Brits to buy non-petrol cars, it has emerged
Ahead of her Budget next month, the Chancellor is said to be drawing up several proposals to hike taxes on EVs to ensure all drivers pay their fair share
Under the current system, EV charging at home incurs the domestic rate of 5 per cent VAT, while motorists using public chargers get hit by the full 20 per cent.
Ms Reeves is currently scrambling for revenue-raisers ahead of her Budget on 26 November.
The IFS think-tank has warned the Chancellor has a £22billion black hole to fill in the public finances.
But it suggested last week that Ms Reeves might want to drum up an extra £20billion to ensure she does not have to come back yet again for more cash.
Other economists have calculated the Government could have an even bigger gulf of £50billion in the public finances.
Labour wants a ban on the sale of all new petrol and diesel cars by 2030, which has left the Treasury facing a scramble to replace the revenue that fuel duty raises as Brits make the switch to EVs.
Earlier this year, the Government's climate advisers piled pressure on the Chancellor to consider alternative levies to address lost receipts from fuel duty.
Ms Reeves is being urged to consider a 'pay-per-mile' scheme, which would see drivers charged for every mile they drive regardless of how they power their cars.
Iceland and New Zealand already have a pay-per-mile taxation policies in place for electric vehicles.
A senior Government source said: 'This is ultimately a decision for the Treasury.
'But they have recognised that any new tax on EVs needs to have a phased implementation and be introduced alongside a generous package of support to ensure we continue to drive the transition.'
