Electric Cars Company Benefits

Switching to electric company cars can bring many benefits including less bik tax for your employees.

Electric cars company benefits.

This zero rate also applies to hybrid vehicles with emissions from 1 50g km and a pure electric range of over 130 miles. Employers looking to provide tax efficient company cars in the future should consider electric cars and hybrid models with a good electric range. If your company car has co2 emissions of 1 to 50g km the value of the car is based on its zero emission mileage figure or electric range. For cars newly registered from 6 april 2020 the majority of company car tax rates will be reduced by two percentage points.

This is the distance the car can go on electric. The benefit in kind value on a 20 000 electric car in 2020 21 will only be 400 costing a higher rate taxpayer 160 in tax considerably less than the 880 payable in 2018 19. One of the reasons is that they attract low benefit in kind rates and can be a really cost effective option when selecting and then running a new company car. Pure electric vehicles are exempt from company car tax from april 2020 onwards with benefit in kind rates increasing to 1 from april 2021 and 2 from april 2022.

In its long awaited response to its review of wltp and vehicle taxes. For employers looking into electric company cars there are now considerable savings to be made. The government says that company car drivers choosing a pure electric vehicle will pay no benefit in kind bik tax in 2020 21. For company car drivers and fleet operators choosing an electric car from april 2020 there will be zero tax on benefit in kind bik during 2020 2021.

This is compared to a maximum of 37 charged on the least co2 efficient vehicles. The value of this is calculated in the same way as for other company cars 1 with the following differences for pure electric cars. Company car tax on electric cars electric cars are becoming more popular and more accessible as each year goes by. If an employer provides an electric car to their employee a taxable benefit in kind will arise.

The savings are especially significant for company car drivers paying a higher rate of tax. Or you can use hmrc s company car and car fuel benefit calculator if it works in your browser.