Many of our clients in the automotive sector are petrolheads by instinct, in love with the beautiful roar of the internal combustion engine.
But you can’t let the heart overrule the head in business, and, increasingly, the savviest are taking an interest in EV as they seek to diversify and future-proof their businesses.
From tax breaks to growing consumer demand, is it time for you to take another look?
Save money, save the planet
So you’re thinking about an electric car for your company, but where do you begin? Why should you consider changing your vehicle to an electric?
We’d argue it’s pretty vital for your business to consider the implications of using an electric vehicle and the benefits it will have for you and your infrastructure.
Any car purchased by companies will qualify for tax relief on a written down basis at either the main rate (18%) or the special rate (6%).
And for any new or unused vehicle with CO2 emissions of 0g/km, a special enhanced capital allowance rate of 100% is available in the year of acquisition.
This means giving back 100% of the cost of the vehicle against your profits and loss, thus giving a clear and simple tax relief.
Benefits in kind
Benefits in kind (BIK) have risen over time, with the fee primarily based on the vehicle’s CO2 emissions. The charge increases as the emissions do.
With fees based on the CO2 emissions of the car, employer-provided cars have become more expensive over time. The BIK charge increases as CO2 emissions rise.
Going electric can result in considerable tax benefits due to future changes to the BIK taxation laws.
The BIK tax for electric and hybrid vehicles with a range of at least 130 miles and emissions of less than 50 grammes of CO2 per kilometre is 1% as of 6 April 2021. For the tax year 2022–2023, the BIK will rise to 2%. The low benefit in kind is predicted to last through at least March 2025.
HMRC imposed a new rate of 4p per mile for fully electric company cars as of September 1, 2018, because it does not consider electricity to be a fuel to calculate automobile fuel benefits.
Employers can pay this tax-free mileage rate when using a corporate electric car for business travel, or employees can claim it.
Electric vehicle charging at the office is entirely tax-free.
Another tax-free benefit is the expense of adding a vehicle charging station at your employee’s residence.
Always check with the manufacturer before installing a charging station at an employee’s house because grants might be available to offset the cost.
So how do I get started?
There are some clear benefits of having an electric vehicle, not least because you’ll be doing your bit for the environment.
And, of course, the tax benefits can make a difference, especially if you need a cost-effective solution to your business’s vehicles.
But as ever, it’s always best to talk to a professional before making any purchase decision.
Get in touch to talk about how electric vehicles can change your business for the better.