Are you one of 1.5m people in the UK who use a company car? Almost time for an upgrade? You could save money and help save the planet with an electric vehicle (EV).
Now, new and generous tax benefits for electric company cars introduced by the Government in April make driving an EV even cheaper!
Company cars and Benefits-in-Kind (BIK)
The BIK scheme allows employees to receive benefits or perks from their work alongside their salary: for example child care, memberships or company cars. Some of these benefits are taxable. Normally, the tax you pay on company cars is calculated by taking a % of the value of the car and adding this to your annual taxable income.
Riveting stuff… However, something that’s got us really excited is that from April this year EVs will be available under BIK tax free!
For non-electric cars the taxable % of the value of the car can be anything from 15-37%, a hefty sum, depending on how polluting they are. But now for fully electric vehicles it is 0%. In other words, starting now, you’ll pay 0% tax on an electric company car, rising to 1-2% in future.
OK, what does that mean in English?
Say, for example, you’re choosing between a diesel/petrol car and an equivalent EV model both worth £30,000. The average new car bought in 2019 emits 128g CO2 per km, so has a BIK rate of 30%. Therefore you’d pay up to £1,800 - £4,050 in tax on the diesel/petrol car depending on your tax bracket, and £0 for the electric.
It’s no wonder company car leasing companies are already seeing huge increases in orders for EVs.
In fact, including other taxes, the average driver pays an estimated £7,000 in tax on a petrol or diesel car over 4 years of ownership, compared to ~£0 for a fully electric vehicle. And considering the £3,500 EV grant available and the £350 available for purchasing a Hypervolt, that dirty old diesel isn’t looking so cheap anymore...
Who says it’s not easy being green?
Interested in purchasing Hypervolt? Tell us about your purchase inquiry here!