Electric Cars – There’s Never Been (Or Going To Be) A Better Time

electric car

Electric cars – love them or hate them there are a few facts we cannot deny…

  • They are most definitely better for the environment
  • They cost less to run
  • The ‘fuel’ tax is much, much less
  • And for now at least, they are a very, very tax efficient mode of transport

But not just yet – hold your horses for another few months…

The government has announced that from 20/21 the benefit in kind rate for pure electrical vehicles will be 0%.

Zero per cent! Nothing, nunca, null, nada!

Will my car be eligible?? Here’s the fine print…

This 0% rate will also apply to company cars registered from the 6th April 2020 with emissions from 1-50g/km with a pure electric mile range of 130 miles or more.

The benefit in kind on these vehicles will increase to 1% in 21/22 and 2% in 22/23.

Cars registered before the 6th April 2020 with emissions from 1-50g/km and a pure electric mile range of 130 miles or more will attract a 2% benefit in kind rate in 20/21 and stay the same for the 2 subsequent years.

What other benefits are there??

Well,  c’mere, there’s more, as Jimmy Cricket would have said (am I showing my age, or nationality more by that reference??):

From the 6th April 2018 Companies have also been eligible to claim 1st year allowances on the purchase of vehicles with CO2 emission of less than 50g/km.

Remember that the 1st year allowances do not count towards your annual investment allowance for the year – bonus!

What about charging – Are there any grants available?

And as if that’s not enough, plug-in grants are available through dealerships when purchasing certain vehicles. If the electric vehicle you’re purchasing qualifies for the grant you will receive a discount of 30% off the purchase price up to a maximum of £3,500.

And if your car isn’t eligible for this grant, do not despair as you may still be able to get up to £500 inclusive of VAT off the cost of installing a charger at home through the electric vehicle home charge scheme!!

If you run a company, then there is also a workplace charging scheme available which provides support towards the upfront costs of the purchase and installation of electric vehicle charge points.

Bonus benefit….

And in a funny twist of fate, you can still claim your 45p mileage allowance on the first 10,000 miles of business travel, even in an electric car – brilliant!

What’s not to like about this??

If you would like to discuss anything further please do not hesitate to contact us!

Let’s start a conversation 

    Subscribe me for updates and news from In Accountancy

    Related articles

    time to pay arrangement
    Limited Companies

    Time to Pay Arrangements: A Lifeline for Owner-Managed Businesses

    Are You Struggling to Meet Your Tax Obligations?

    More than 30,000 UK businesses were involved in some kind of insolvency action in 2023, which was an increase of more than 50% compared with 2021 according to an article in the Guardian earlier this year.

    And the economic outlook would suggest that despite the fact that we are no longer in recession, 2024 and 2025 will be a challenging year for UK small business.

    With this in mind we have prepared the following guide and associated video to help you understand what your options are with regards to agreeing what is known as a ‘Time to Pay’ arrangement with HMRC.

    Read More »

    Find out how we can help?

    Lectus scelerisque a donec tincidunt litora per eleifend eget ut sagittis conubia pharetra scelerisque dui ultricies duis parturient auctor adipiscing.


    Let’s start a conversation 

      Subscribe me for updates and news from In Accountancy