Electric Cars are going to be a hotly discussed topic over the coming years, especially since the UK government has recently invested £93m into EV projects such as batteries, charge points, hydrogen alternatives and continued development into small and medium commercial vehicles.
But, what does this mean for businesses, and what are the tax incentives that come with them?
If your company purchases a new electric car, you will get full tax relief in the first year of purchase, representing the most generous Capital Allowance saving.
For example, buying a £50,000 car will generate £9,500 worth of Corporation Tax savings (£50,000 Purchase Price x 100% First Year Allowance x 19% Corporation Tax Rate). This compares very favourably to non-electric cars which receive only 6% (£570) or 18% (£1,710) relief in year one.]
Additionally, an electric car with nil CO2 emissions can also be utilised for personal use and would only generate a small employment benefit in kind (being currently only 1% of the listed price of the car).
Combined with the environmental benefits and the relatively low cost of electricity, if you’re considering purchasing a new car it’s certainly worth considering an electric one – and your customers and clients will appreciate it too!
Another government scheme that your business should consider is Cycle to Work, where you can benefit from tax savings to help your employees purchase a bike with the gross earned salary, rather than out of taxed or net income.Savings can vary between 32% to 42%, plus there are plenty of celebrated vouchers, discounts and benefits that you can also hope to take advantage of.
If an employee is already cycling to work, the scheme also applies to accessories and upgrades, promoting the use of them into the future and beyond!
If you’d like to learn more about how these incentives might be right for you and your business, contact us today.