In the past we have tended to advise against having a company car due to the hefty benefit in kind taxes on the employee and the minimal tax relief that employers actually received. However in an attempt to boost the sale of electric vehicles by the government, this is set to change.
From 2020 benefit in kind tax for electric vehicles is dropping to 0% – meaning employees will pay no additional taxes if they use a company car that is purely electric. This will increase to 1% in 2021 and then to 2% in 2022 – but this is still a massive saving compared to current rates!
Not only this, the company will be able to claim 100% first year allowance on the cost of the vehicle giving them greater tax savings in comparison to traditional petrol/diesel cars. On a similar note installing electric vehicle charging points will attract 100% first year allowance up until 2023, so employees and customers can recharge on site.
With the predicted huge increase of electric vehicle sales, this could boost your business with electric vehicle drivers always on the lookout for charging points!
So whilst helping boost the UK’s switch to ‘green’ you also have the potential to save some money!