The sale of new petrol and diesel cars will be banned in the UK from 2030, meaning that the purchase of an electric vehicle is a choice that more people will make.
There are significant tax and NIC benefits for businesses considering electric vehicles for company cars.
Currently, a 100% electric car incurs no road tax duty. As a company vehicle, an electric car currently incurs a 2% benefit in kind charge. The lower benefit in kind charge automatically generates a lower Class 1A NIC charge which will benefit both employees and employers.
100% first year allowances can be claimed on expenditure incurred on new fully electric vehicles, and charging points, to reduce the company’s taxable profits.
For expenditure on new charging points between 1st April 2021 and 31st March 2023, businesses can benefit from the super-deduction which offers 130% first year allowances.
The Government’s plug in car grant provides grants up to £2,500 towards the cost of an eligible plug-in vehicle. It’s applied at the time of purchase and is usually given as a discount off the purchase price.
For further advice on the tax treatment of electric vehicles, please contact us and speak to our specialists.
Electric Vehicles: Good for the planet, and for your pocket!
