Government grants are currently available via the Office for Low Emission Vehicles to support the wider use of electric and hybrid vehicles. To qualify, work has to be carried out by Government-approved installers, using products from approved suppliers.

As an authorised installer, Mr Electric Birmingham North can apply for Government grants on behalf of domestic and commercial customers to reduce the cost of installing charging points at homes, workplaces and destinations.

The Workplace Charging Scheme

This offers support for eligible businesses, charities and public-sector organisations towards the up-front costs of the purchase and installation of electric vehicle charge points. This could equate to £500 per socket, up to a maximum of 20 sockets.

Get in touch now to find out how we can help you reduce the cost of installing electric vehicle charging points.

Tax Advantages For EV Fleet Owners

FLEET & BUSINESS

Tax benefits

Reduce your tax bill with electric vehicles

The motoring tax regime is designed to favour the take-up of ultra low emission vehicles – so make the most of it!

Key points:

  • Businesses and company car drivers can save thousands of pounds switching to plug-in vehicles
  • Benefit in Kind (BIK), Vehicle Excise Duty (VED), capital allowances, and salary sacrifice regimes all incentivise electric vehicles
  • Planned changes to company car tax rules will strengthen the case for going electric

Understand tax and make the biggest savings

Eligible plug-in vehicles benefit from government grants and tax incentives, which help to reduce the total cost of ownership and aim to make electric cars more affordable for you and your employees. Along with reduced fuel expenditure this is where you can make the most cost savings.

Benefit-in-Kind and Class 1A National Insurance

Company car benefit-in-kind (BIK) tax rates are set in advance to enable businesses to plan their vehicle choice lists and calculate the financial cost to themselves and employees. Like BIK tax, employers’ Class 1A National Insurance contributions, are linked to a car’s CO2 emissions and P11D value.

Table 1 below compares the BIK tax costs for a four year period between 2017 and 2021. It compares a zero emission vehicle with a P11D of £30,000 and an identically priced petrol car that emits 104g/km CO2, revealing the yearly savings for lower (20%) and higher (40%) rate drivers.

Table 1 – BIK tax costs for a four year period between 2017 and 2021

£30,000 P11D value 2017/1820%/40% 2018/1920%/40% 2019/2020%/40% 2020/2120%/40% Total (4 years)20%/40%
Zero emission £540/£1,080 £780/£1,560 £960/£1920 £120/£240 £2,400/£4,800
Petrol (104 g/km CO2) £1,140/£2,280 £1,260/£2,520 £1,440/£2,880 £1,500/£3,000 £5,340/£10,680
Saving £600/£1,200 £480/£960 £480/£960 £1,380/£1,760  £2,940/£4,880

Over four years, up to including 2020/21, a lower rate company car driver would pay £2,940 less in BIK tax driving the electric vehicle, while a higher rate taxpayer would pay £4,880 less.

The Government has deferred the planned increase in BIK tax for electric vans, meaning it will stay at 20% of the rate of a diesel or petrol van until 2018.

 

Table 2 highlights the yearly Class 1A NIC savings for employers.

Table 2 – Class 1A NIC savings

At £30,000 P11D value 2017/18 2018/19 2019/20 2020/21 Total (4 years)
Zero emission £373 £538 £662 £83 £1,656
Petrol (104 g/km CO2) £787 £869 £993 £1035 £3,684
Saving £414 £331 £331 £952 £2,028

Source: HMRC, Go Ultra Low calculations

Based on this P11D, you would save your business a total of £2,028 in Class 1A NIC over a four year period by choosing the electric vehicle. On a fleet of just 10 models, that equates to a saving of more than £20,000.

Over four years, up to including 2020/21, a lower rate company car driver would pay £2,940 less in BIK tax driving the electric vehicle, while a higher rate taxpayer would pay £4,880 less.

The Government has deferred the planned increase in BIK tax for electric vans, meaning it will stay at 20% of the rate of a diesel or petrol van until 2018.

Tax changes from 2020/21

Changes from the 2020/21 tax year are designed to give you further incentive to operate electric vehicles and encourage your employees to choose them as company cars.

A total of 11 new bands for ultra-low emission vehicles below 75g/km will be introduced – five are linked to the number of miles a car can travel on electric power alone – including a separate zero emission band. Vehicles emitting 51-54g/km will be taxed at 15%, after which a one percentage point increase applies per 5g/km CO2.

It’s time to start planning for your next fleet cycle…

For any questions contact us here