GET YOUR QUOTE NOW
CALL THE TEAM NOW
Accountants247 Urmston
  • Home
  • Our Services
    • Accounts
    • Tax Returns
    • VAT Returns
    • Bookkeeping
    • Payroll
    • Financial Director Service
    • Pensions
    • CIS Returns
  • Get a Quote
  • The Blog
  • Contact Us
Accountants247 Urmston
  • Home
  • Our Services
    • Accounts
    • Tax Returns
    • VAT Returns
    • Bookkeeping
    • Payroll
    • Financial Director Service
    • Pensions
    • CIS Returns
  • Get a Quote
  • The Blog
  • Contact Us
GET YOUR QUOTE NOW
CALL THE TEAM NOW
Accountants247 Urmston

Should I get an electric vehicle?

Jenny by Jenny
in Business
Reading Time: 3 mins read

Having a company car used to be seen as a considerable perk. But in recent years it’s become less clear whether having a conventionally powered company car as part of your income mix is a good idea – both from a tax perspective and from a sustainability angle.

electric car

The good news is that electric vehicles (EVs) are now more readily available. And choosing an electric vehicle as a company car may well be a great idea from both an eco and tax perspective.

A greener choice of car?

Having an electric vehicle as your company is a more eco-friendly choice in many ways. An EV has zero tailpipe emissions, produces less noise pollution and can be cheaper to run. 

There are arguments over the green credentials of EVs, as lithium batteries will eventually need replacing and electrical power to charge the batteries currently still relies heavily on carbon-based power stations. But as technology, battery recycling and the use of renewable energy increases, having an EV as a company car will certainly help you do your bit for lowering carbon emissions.

Taxing a company car

When you tax a company car, there are two tax areas to consider:

  • The tax deduction for the company when acquiring the vehicle
  • The personal tax benefit in kind (BIK) value on which the driver is taxed.

Both of these are tipped in your favour when comparing the rules for EVs compared with conventionally powered internal combustion engine vehicles (ICEVs).

Tax allowances for EVs

For the company, 100% first-year allowances can be claimed on the purchase of an EV, provided that it’s new and unused. Any charging point you install at the business for your EV will also qualify for the super-deduction of 130% of the cost, which is certainly a good incentive.

Compare this to the company buying an ICEV. No first-year allowances are available but annual writing down allowances of 6% (18% if emissions < 50g/km) can be claimed instead.

As the driver of the vehicle, your benefit in kind (BIK) is calculated at 2% of the vehicle’s list price for the current tax year. ICEV rates are far higher, ranging up to 37%, depending on emissions. In the most common band the BIK is around 28%. If your fuel is provided, as an EV driver, you pay no additional tax, whereas an ICEV driver pays tax on an additional amount calculated by multiplying the vehicle BIK rate by £25,300.

Is now the time to switch to an EV?

If you’ve previously dismissed the idea of a company car because of the complex and expensive tax regime, now may be the time for a rethink. 

Opting for an EV is currently a tax-efficient option and there are still incentives for both companies and individuals to explore the EV route. Going electric is a more sustainable option than a petrol-guzzling ICEV and you may well save on running costs as well.

Talk to us about the tax implications of an EV

If you’re thinking about getting an EV as a company car, come and talk to us at Accountants247 in Urmston, Manchester. We’ll help you calculate the tax impact for both the company and driver, and can explain the relevant capital allowances that can be claimed when purchasing an EV for the company.

Previous Post

Why you should have a business continuity plan

Next Post

Understanding Your Balance Sheet

Next Post
balance sheet

Understanding Your Balance Sheet

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Accountants247 Urmston

Accountants247 Urmston

Accountants247 provide cost-effective, high value solutions to meet every clients needs regardless of the size of their business.

Search

No Result
View All Result
LinkedIn Facebook Twitter
Accountants247 Urmston

Hi, i'm Lucas. If you have any questions please email me at lucas@accountants247.co.uk

Articles

  • B2B (1)
  • Bookkeeping (2)
  • Business (52)
  • Capital Gains Tax (3)
  • Cashflow (3)
  • Childcare (3)
  • Corporation Tax (3)
  • Deadlines (1)
  • Dividends (2)
  • Expenses (4)
  • GDPR (2)
  • IR35 (1)
  • Landlords (2)
  • National Insurance (2)
  • News (5)
  • Pay (2)
  • PAYE (2)
  • Pensions (3)
  • Property Tax (1)
  • Sales and Marketing (1)
  • Scams (1)
  • Services (6)
  • Software (1)
  • Starting a business (4)
  • Tax (23)
  • Testimonials (4)
  • Uncategorized (2)
  • Urmston Businesses we help (5)
  • VAT (1)

Contact Us

lucas@accountants247.co.uk

Call 0161 8239 241

Accountants247 Urmston

144 Suite 6, Third Floor, 144 Grampian House, Deansgate, Manchester, England, M3 3EE

Company Registration Number 13938712

Accountants 247 © 2022.

No Result
View All Result
  • Home
  • Our Services
    • Accounts
    • Tax Returns
    • VAT Returns
    • Bookkeeping
    • Payroll
    • Financial Director Service
    • Pensions
    • CIS Returns
  • Get a Quote
  • The Blog
  • Contact Us

Accountants 247 © 2022.

  • ↓
  • Contact Us

    Leave a message and one of the team will get back to you shortly

  • WhatsApp
  • Facebook Messenger