The UK car industry has welcomed the British government’s decision to offer extended tax reductions for electric vehicles to fleet buyers and commercial vehicles. The tax breaks are already offered to private car owners.

In his pre-budget report Alistair Darling has reported that electric powered vehicles would be exempt from company car tax for five years, with electric vans also exempted from the van benefit charge. Van operators will also be further bolstered by changes that will see them able to write off the full cost of any corporate taxes in their first year.

Earlier this year the UK government announced a range of tax breaks that ranged from £2,000 to £5,000 as of 2011 for private purchasers of electric cars, a move which has prompted industry analysts to suggest that significant subsidies to offset the launch costs. Regardless, the demand from business owners and fleet operators to purchase electric vehicles is expected to be high as companies face increasing public pressure to use eco-friendly practices. Recharging arrangements can also be made far easier by companies than private consumers.

The new move to extend the tax breaks to electric vans and company cars has been on the table for some time with rumours abounding ahead of the announcement on Wednesday. Car maker Renault, which has plans to release two new electric cars and an electric edition of the Kangoo van in the coming years, was delighted with the decision.