Electric company car benefits add up
Not only do electric vehicles provide a way to build sustainability and carbon reduction into your life and your business, but there are several electric vehicle grants and incentives, which offer a host of financial benefits – whether you’re a fleet manager or a company car driver.
A rewarding choice
As we head along the way to zero, and we become ever closer to the 2030 ban on petrol and diesel cars, more and more drivers and businesses are charging ahead in the switch to electric vehicles. And with an ever-growing choice of new vehicles, options for all company car drivers and increasing confidence in the charging infrastructure, sales of electric vehicles are growing strongly. According to the Society of Motor Manufacturers and Traders
(SMMT), plug-in electric vehicles accounted for a record-breaking more than one in six UK car registrations in 2021, while battery electric vehicle (BEV) registrations rose to an all-time high of one in nine, with more registered than in 2016-2020. Source: Electric Vehicle Infrastructure position paper - SMMT The SMMT's figures also suggest that in terms of demand, Britain is now the second-largest major EV market in Europe, with the most ambitious end of sale targets. Source: Plugging The Gap - SMMT
And as you can see here, the Government offers several financial incentives to encourage uptake.
Reduced Benefit in Kind (BiK) on electric cars
With Benefit in Kind (BiK) rates for electric cars with electric mileages of over 130 miles and with registered CO2 emissions of under 50mg set at just 2% until 2024/25, the appeal of running an EV as a company car is obvious.
Plug-in hybrids will count as low-emission vehicles until 2030. Because the tax charged is directly related to the carbon dioxide level a car produces, the tax value of plug-in hybrids is based on how far they can drive in electric mode.
Is charging your car at work a Benefit in Kind (BiK)?
Electricity is not classed as a vehicle fuel by HMRC, so if the company provides charging points at work, this does not count as a Benefit in Kind.
Electric Vehicle Homecharge Scheme (EVHS) grant
Homeowners who live in flats or people in rental accommodation are eligible for the Electric Vehicle Homecharge Scheme (EVHS) grant that provides a 75% contribution to the cost of one charge point and its installation. A grant cap is set at £350 (including VAT) per installation. The government has confirmed that the EVHS will be funded until at least
Lower Class 1A NIC
Reduced BiK rates on electric vehicles also offer significant Class 1A NIC savings to employers.
Vehicle Excise Duty (VED) exemption
Zero emission cars are exempt from Vehicle Excise Duty (VED) until at least March 2025. The exception to this rule is any car costing more than £40,000 will incur an additional premium rate for 5 years starting from year 2. After the sixth year, VED reverts to just the standard annual rate
.Enhanced capital allowance
Companies and unincorporated businesses are also eligible for 100% first-year allowance enhanced capital allowances when buying a fully electric car (0g/km of CO2)
Workplace Charging Scheme
Via the Office of Low Emission e Vehicles (OLEV), workplaces can install up to 20 sockets, with the grant providing £500 per socket towards the cost, up to £10,000.
Savings on business mileage
The Advisory Electricity Rate for fully electric cars is 5 pence per mile - considerably less than even the smallest petrol or diesel engine.
Moreover, there are a number of other ways that electric vehicles can deliver financial benefits. As well as costing less to 'fuel' than conventional diesel or petrol cars, electric vehicles have fewer moving parts and wear and tear items such as brake pads. Additionally, they may also be exempt from ULEZ and congestion charges.
With electric cars as company cars ...
• ... you will enjoy a much lower Benefit in Kind (BIK).
• ... this also covers plug-in hybrids that can travel further on electric power.
• ... on their way to work, employees save on tax and reduce carbon emissions.
With electric cars as company vehicles
• ...you will benefit from enhanced capital allowances
• ...you will be making a demonstrable commitment to reducing your carbon emission
• ...stronger environmental credentials for your business
• ...significant Class 1A NIC savings to employers
As well as reducing carbon footprint and aligning with sustainability targets, businesses are fast switching on to the fact that given the financial benefits. Now is the perfect time to get your business prepared for the futur