The Government has extended its Plug-In Car Grant, which offers 25% - up to £5,000 - to buyers of an electric car, to 2015 and has included vans in the initiative for the first time.

Van buyers will be able to receive 20% - up to £8,000 - off the cost of a plug-in van, Transport Minister Norman Baker and Business Minister Mark Prisk have announced.

John Lewis, chief executive of the British Vehicle Rental and Leasing Association, said: “It is great that the Government has listened to the feedback from business fleets, who have spent the last year telling the Government that the van market was crying out for this sort of low-carbon incentive.

“Electric vans are very expensive, but the combination of this grant, much lower running costs and some significant tax benefits will enable many fleets to take the plug-in van plunge.

“As well as identifying which vehicles will qualify for the grant, we hope that the Government will learn the lessons from its introduction of the plug-in car grant by moving much more swiftly to clarify how the grant will be treated for VAT purposes.”

The Plug-in Car Grant scheme was introduced 12 months ago in a bid to kick-start the electric vehicle revolution in the UK. However, to-date demand has been slow with only 1,052 vehicles eligible for the Plug-In Car Grant registered and 892 Grant applications made last year.

Employees see expense fiddling as a legitimate way of supplementing their salary with personal budgets under pressure, and mileage expenses are the most likely to be exaggerated.

A survey of 2,130 UK adults conducted by YouGov for expenses management company Concur revealed that with the nation feeling the pinch, one in five people (18%) believe it is acceptable to fiddle exaggerate expenses ‘when an employee works long hours but isn’t paid any overtime’.

The same percentage of employees also believes they are entitled to fiddle if they ‘don’t feel they are fully reimbursed’ for all the costs they have incurred on behalf of their employer.

Mileage is the biggest area of potential expense fiddling with over one in four (26%) judging it acceptable to exaggerate expense claims when the ‘mileage rate paid by the employer doesn’t cover the actual car and fuel costs’.

Government claims that reducing MoT frequency will reduce the financial burden on motorists have been questioned by a report which shows that proposals to scrap annual testing will hit both motorists and the UK economy hard.

The report by Pro-MOTe - ‘A cost too far’ - estimates that the average motorist would be more than £57 worse off under a less frequent MoT system than they are today.

It also shows that the overall cost to the UK in increased costs of road deaths, injuries and damage, as well as 40,000 lost jobs and reduced tax revenues, would be £1.44 billion if the Government presses ahead with a proposal for a less frequent MoT.

The research by the organisation, which is campaigning against plans to reduce MoT frequency and is supported by a wide cross section of organisations including the AA, Kwik-Fit, Halfords, RAC, insurers and road safety groups, compares costs of the existing 3-1-1 MoT system (where cars over three years are tested every year) with the 4-2-2 system more commonly used elsewhere in Europe (where cars over four years old are tested every two years).

Pro-MOTe co-ordinator Bill Duffy said: “This research shows that scrapping annual MoT testing would not only be dangerous but prove very expensive too, to both drivers and taxpayers alike. It is time for the Government to scrap this dangerous, expensive and unwanted plan.”

The Court of Appeal is to hear a long-running case related to National Insurance contributions paid on mileage reimbursement with potentially £200 million at stake.

The Upper Tribunal has granted permission for tax experts Grant Thornton UK to go to the Court of Appeal on behalf of apprenticeships and workplace-based training supplier Total People Limited, which is taking on HM Revenue and Customs.

The case relates to a National Insurance contribution refund claim based on the difference between HM Revenue & Customs’ then 40p per mile allowable tax-free mileage reimbursement  rate for own car use and the 12p per mile paid by the employer plus an additional lump sum paid to the employees for using their private cars on business.

Grant Summers, tax partner at Grant Thornton UK, said: “We are pleased that the Upper Tribunal has acknowledged that this issue has wider implications. We are led to believe that the potential impact of this decision could be around £200m. It is important that there is clarity about the conditions which must be met for payments of this kind to be exempt from National Insurance contributions.”

Total People accounted for National Insurance contributions on the car allowance payments, but then applied for repayment as the payments were deemed not ‘earnings’ but were reimbursements covering motoring expenditure, which are not liable for National Insurance. It is believed that many companies will have paid National Insurance on such reimbursements.