Save through Benefit in Kind
The biggest financial benefit will be the favourable treatment of pure electric cars under the Benefit-in-Kind (BiK) taxation applied to company cars. In summary, BiK works by taxing employees on the benefit they receive if their employer provides them with a company car as part of their overall remuneration package.
The main point to note is that, from April 2020, the BiK rate on 100% electric cars will be 0%, reflecting their emissions of 0 g/km. That rate will rise to just 1% in April 2021 and 2% in April 2022. However, the most polluting cars – models which emit more than 165 g/km – will remain taxed at 37%.
On an executive's car over three years this could save £42,683!
Save through Writing Down/Capital Allowances
Another powerful Government incentive comes in the form of 100% Writing Down Allowance (WDA). In short, this allows a business which purchases (or hire purchases) an EV for business use, to set 100% of the cost of that EV against the company’s income in the tax year during which the purchase was made. Loading 100% of the EV on to the cost side of the business in a single year obviously reduces profits and, by extension, the tax the company has to pay on those profits.
Here is more information on the other benefits such as lower running and maintenance costs.
Call us to discuss or to attend one of our Electric Vehicle:Showcase for Business events - next one Jan 24th 2020 at Rudding Park