Tax cuts boost sales for electric vehicles
Electric vehicles have long been the choice of drivers concerned about their impact on the environment, but new tax cuts announced by the government now make them a compelling case for cost-conscious businesses, too.
There are various types of electric vehicles, or EVs, ranging from mild hybrids in which an electric motor is added to help improve fuel efficiency, through to pure electric vehicles which are entirely driven by battery.
All are more fuel efficient, produce lower emissions and are therefore kinder to the environment than the petrol or diesel equivalents we have been used to. And in turn, that’s great for your company’s CSR agenda. There’s a feel-good factor for your employees, and you can promote your green choices on your website, in your marketing materials and even in your tenders.
But perhaps most importantly to company owners, there are many cost savings to be found. EVs are far cheaper to fuel and maintain than their petrol or diesel equivalents. And there are major tax savings for both you and your employees.
Businesses offering EVs as company vehicles enjoy lower car tax and NI bills. And zero-emissions vehicles - the fully electric kind - have a benefit-in-kind (BIK) tax rating of zero per cent for the 2020-21 tax year (scheduled to increase by one per cent each year after that). A driver of a fully electric car can end the year with no company car tax to pay.
EVs are appealing to a more diverse range of drivers and companies.
To compare, vehicles emitting CO2 are taxed on a sliding scale, through 22 per cent BIK tax on vehicles with 95g/km CO2 emissions, up to 37 per cent on the highest band.
It’s still too early for EVs to be the automatic choice. The variety of models on the market is still somewhat limited and the higher on-the-road value can sometimes eat into those tax savings. And until charging points are more common than they are today, they won’t suit every type of driver or commuter.
That said, EVs have never been more appealing to a more diverse range of drivers and companies. The new tax cuts will increase their viability for many more businesses, and that has the added benefit of making company cars on the whole more attractive.
A company car programme, versus individual ownership, gives businesses greater control and makes fleets more consistent and much easier to manage while reducing paperwork, reducing costs and improving safety and wellbeing.
If you’re interested in EVs and would like to know more, we’d be happy to discuss your company’s needs and find which options are best for you and your budget.
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