Tempted to buy an electric car but unsure if now is the right time?
For those of you who haven’t heard of the tax benefits of buying an electric car through your company or perhaps you need a reminder:
The good news is that if you do buy an electric car now and before 6 April 2020, you would benefit from two years of 0% taxable benefit charge covering tax year’s 201919/20 and 2020/21.
A taxable charge will arise from tax year 20/21 rising to 1% and expected to rise and remain at 2% from 2022/23 tax year onwards.
Did you know?
Buying an all electric vehicle is also eligible for salary sacrifice which allows employees to reduce their salary in exchange for the benefit of having a fully electric company car.
An employer will not only be supporting their employees’ move to carbon neutral but also both employee and employer experience lower National Insurance Contributions, which will be calculated on the lower salary amount after the deduction of electric car payments.
And if that wasn’t enough……
A company buying a brand new all electric car outright or through a finance lease between 1st April 2020 and 1st April 2021, qualifies for a 100% first year allowance.
And there’s more…..
As an electric car owner, you can reclaim 4p per mile from your company to cover electricity costs when charging at home or at a public charging point. Furthermore, you benefit from no road tax for electric cars with a list of price of under £40,000.
And if you are still undecided or unsure if this is the right time to buy an electric car, perhaps due to the lack of charging points, if you install a charging point at work it is an allowable cost and you will get a reduction on your corporation tax bills with “fuel” costs reducing significantly.
With government interest-free loans available to individuals and companies of up to £35,000 and potentially 1 to 2 years tax free incentives, this could be the time to think seriously on such a purchase.