Companies go BIK on electric cars as eco revolution accelerates

By Azets

30 Jun 2022

companies-go-bik-on-electric-cars-as-eco-revolution-accelerates-min.jpg

Unprecedented demand is being seen by Azets, the UK’s largest regional accountancy firm and business advisor to SMEs, following a new strategic partnership with Total Motion, a major UK fleet management and leasing provider which offers salary sacrifice car schemes via trading company Pink Salary Exchange.

Robert Wardle, head of tax at Azets in the North West, provides advice to employers looking to move away from diesel and petrol towards a green fleet, including plug-ins.

He said: “The UK’s net-zero carbon strategy is rightly focusing minds in a way we’ve never witnessed before and this is showing through increased demand for electric battery company cars.

“We are inundated with requests from companies keen to reward staff with a government-approved tax ‘benefit in kind’ through zero carbon or low carbon emission vehicles.

“Around 90 per cent of our advisory work on company cars used to involve internal combustion engines (ICE), with the remaining 10 per cent covering electric – now the position seems to have reversed. The trend is toward a very strong focus on the provision of electric vehicles as part of the overall employee reward package. This seems to be the trend across the UK.

“Not only that, employers, with Environmental, Social and Governance on the boardroom agenda feel it is the right thing to do for the environment as we move away from polluting fossil fuels.

“There is the perception aspect to consider these days – pulling up to a meeting in a diesel car may leave customers wondering if your company is practising what it preaches.

“There’s also the regulatory side – companies are looking to pre-empt any bans on diesel and petrol vehicles in certain locations.

“It is perhaps only a matter of time before diesel and petrol cars are prohibited from travelling in ‘smog cities’ and it is worth bearing in mind that the government has announced new proposals which would see more than 50 per cent of all new cars sold to be fully electric by 2028, just six years away.

“One more factor is also driving demand – diesel and petrol costs are at record highs.”

Demand for new electric cars is borne out by industry data – nearly 191,000 were on the roads in 2021, an 11.6 per cent share of the new-car market in the UK.

Robert said: “According to industry forecasts, pure-electric cars are poised to make up one in six new cars on the roads this year and this will undoubtedly accelerate as the supply chain improves and the charging infrastructure grows.”

He added: “Where an employee receives a company car by reason of employment, this gives rise to a taxable ‘benefit in kind’, known as BIK.

“Income tax, payable by the employee, and Class 1A NICs, payable by the employer, are due on the ‘cash equivalent’ of the benefit. 

“But conventionally fuelled vehicles are more expensive for both employee and employer – electric vehicles, and to a lesser extent, hybrid vehicles, provide significant advantages in this regard.” An illustrative example is included below.”

Azets’ strategic partnership sees the Top 10 accountancy firm provide advice to businesses on tax planning and Total Motion matching demand and marques. 

Total Motion Director Simon Hill, based at the company’s headquarters in Leicester, said: “Our partnership with Azets is helping decarbonise road traffic as more companies look to the environmental, tax, staff retention and reputational benefits of pure-play electric vehicles for directors and employees.

“From 2030, which is not that far off the horizon, the sale of new petrol and diesel cars will be banned. That cut-off date is focusing many minds.”

Example EV vs ICE BIK comparison 

 

Vauxhall Corsa SE

BMW 330d M Sport

Nissan Leaf Tekna

Tesla Model 3

Fuel Type

Petrol

Diesel

Electric

Electric

List Price 

£15,356

£44,035

£34,440

£48,490

CO2 Emissions (g/km)

93

137

Nil

Nil

2022/23 BIK (%)

23%

32%

2%

2%

Cash Equivalent

£3,530

£14,091

£689

£970

Employee Marginal Tax Rate

20%

40%

20%

40%

Income Tax on BIK

£706

£5,636

£138

£388

Class 1A NI costs

£262

£2,121

£51

£146

Total Tax Cost

£968

£7,757

£189

£534

Tax Saving (employee)

-

-

£568

£5,249

Class 1A NI saving (employer)

-

-

£211

£1,975

Latest news

1

Chiptech announces major innovation initiative at high-profile reception with the New Zealand Prime Minister in London. The Rt Hon Jonathan Reynolds, the Rt Hon Christopher Luxon and the Rt Hon Steve Reed (L-R Front Row) David Hammond, and Daniel Knowles

Chiptech announces major innovation initiative at high-profile reception with the New Zealand Prime Minister in London.

30 Apr 2025

2

Northstone secures full planning permission for 50 new homes in Edenfield Edenfield housing development

Northstone secures full planning permission for 50 new homes in Edenfield

29 Apr 2025

3

Ring Stones Maintenance and Construction celebrates completion of Dovestone Gardens Dovestone Gardens launch

Ring Stones Maintenance and Construction celebrates completion of Dovestone Gardens

29 Apr 2025

4

PHX Training welcomes new business leader to drive learner success Louise Kirby

PHX Training welcomes new business leader to drive learner success

29 Apr 2025

5

Lidl to invest half a billion pounds in its expansion as it eyes sites in Lancashire Lidl

Lidl to invest half a billion pounds in its expansion as it eyes sites in Lancashire

29 Apr 2025

Pc Prestonmacan Gif980x120 March
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV122 May/June Launch Event
121 Lancashire Business View Magazine Launch
Networking
21 May 2025

LBV122 May/June Launch Event

Lancaster and Morecambe College, Lancaster, LA1 2TY

08:30 - 10:30

Sub36 Networking
Networking
11 Jun 2025

Sub36 Networking

British Jewellery School, Scorton, PR3 1BA

15:00 - 17:00

Lancashire Net Zero Carbon Conference
Net Zero Carbon Social 1200px 2
Networking
18 Jun 2025

Lancashire Net Zero Carbon Conference

Crow Wood Hotel & Spa Resort, Burnley, BB12 0RT

08:30 - 13:00

Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

RISE - The Academy for Female Leaders and Managers
WENDY BOWERS RISE Illustrstion copy.jpg.jpg
LBV Hub Seminars
02 Apr 2025 - 08 Oct 2025

RISE - The Academy for Female Leaders and Managers

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:00 - 15:30

Planning for the future + navigating Inheritance Tax changes
Planning for the future + navigating Inheritance Tax changes for website.png.png
LBV Hub Seminars
01 May 2025 - 01 May 2025

Planning for the future + navigating Inheritance Tax changes

Stanley House Hotel, Mellor, Blackburn, BB2 7NP, Blackburn, BB2 7NP

08:00 - 10:30

Advantage: AI – A Workshop for Business Leaders – May 2
EV-land-2025-05B.png.png
LBV Hub Seminars
02 May 2025 - 02 May 2025

Advantage: AI – A Workshop for Business Leaders – May 2

Door4 Office, Burnley Wharf, Manchester Road, Burnley, BB11 1JG

09:00 - 11:00

A night at the races
1.png.png
LBV Hub Dinners / Balls
02 May 2025 - 02 May 2025

A night at the races

Morecambe FC, Morecambe, LA4 4TB

19:00 - 23:59

Research and Knowledge Exchange Showcase
13421_research_knowledge_exchange_2025_600x300.jpg.jpg
LBV Hub Awards
07 May 2025 - 08 May 2025

Research and Knowledge Exchange Showcase

University of Central Lancashire , Preston, PR1 2HE

09:00 - 17:00

Innovating business solutions through PhD Partnerships
30478 Skills Bootcamp open day setting.jpg.jpg
LBV Hub Networking
07 May 2025 - 07 May 2025

Innovating business solutions through PhD Partnerships

University of Central Lancashire, Preston , PR1 2HE

14:30 - 15:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more Lbv121 Online Graphic
Subscribe now

Weekly news bulletin