If you are about to change your company car, consider switching to an electric Chesil Speedster. You could save a small fortune in tax.
The UK government is pushing strongly for the adoption of electric cars as we move closer to the ban on the sale of new petrol and diesel cars in 2030. To incentivise people to make the switch, there are a number of benefits of buying an electric car, particularly if you are a business owner.
There are the obvious savings from zero road tax and not having to refuel with petrol or diesel but more significant savings are available from Capital Allowances and Company Car Tax (Benefit in Kind) when compared to fossil fuel burning alternatives.
Cars with CO2 emissions of less than 50g/km are eligible for 100% first year capital allowances (FYA). This means with electric cars, you can deduct the full cost from your pre-tax profits. In the March 2020 UK Budget, the Government announced that 100% FYA for businesses purchasing low emission cars will be extended until 31 March 2025.
Company Car Tax (Benefit in Kind)
For tax year 2021/22 the Benefit in Kind rate for electric vehicles is 1%, in 2022/23 to 2%, in 2023/24 and 2024/25 the rate stays at 2%. This offers a significant saving compared to petrol and diesel alternatives.
For more information, please contact us or speak with your accountant.