Switch to electric vehicles to benefit your bottom line

Paying more attention to your bottom line? There are many ways in which switching to electric vehicles can save your business money.

Purchasing a fully electric vehicle allows a business to claim enhanced capital allowances.

The full cost of any electric car with zero CO2 emissions can be deducted from company profits before tax in the first year. This includes hire purchase agreements, or contract purchase agreements with final payments.

If you prefer to hire or lease, the full rental cost of an EV or plug-in hybrid vehicle (where CO2 emissions are lower than 50g/km) can be deducted from profits before tax, including any unrelieved VAT.

The running cost of an EV is considerably cheaper than the equivalent petrol/diesel car: around 5p/mile compared with 13p to 25p.

And electricity isn’t considered a fuel for car fuel benefit purposes, either.

EVs operating in congestion or low emission zones are exempt from charges (with correct registration). In London this can be as much as £27.50/day for high polluting vehicles.

Company car tax (Benefit in Kind) for drivers is considerably lower, enjoying 2 per cent BIK until at least April 2025, compared with between 20 to 37 per cent for petrol or diesel alternatives.

Not only does this result in income tax savings for employees, it substantially reduces Class 1A Employers’ National Insurance Contributions.

EV charging points and installation for businesses, charities and public sector organisations can also be subsidised by up to 75 per cent using the Workplace Charging Scheme.

Eligible applicants receive a voucher of up to £350 per socket with a maximum of 40 sockets (1 per site).

Enjoyed this? Read more from Adam Cunliffe, XLCR Vehicle Management

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