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<p>The government already provides ‘Plug-in Grants’ for zero emission cars and ultra-low
emission vans, motorcycles and taxis, which provide a discount on the cost of a new
vehicle, reducing the price paid by the consumer. At the Spending Review 2020, the
Chancellor confirmed £582m to extend these grants to 2022/2023.</p><p> </p><p>With
regards to VAT on electric vehicles, VAT makes a significant contribution towards
the public finances, raising around £130 billion in 2019/20, and helps fund the Government's
priorities including the NHS, schools, and defence. Any loss in tax revenue would
have to be balanced by a reduction in public spending, increased borrowing or increased
taxation elsewhere.</p>
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