Electric Cars Company Benefits

Employers looking to provide tax efficient company cars in the future should consider electric cars and hybrid models with a good electric range.

Electric cars company benefits.

The lower appropriate percentages for zero emissions vehicles will apply. 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. 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. The savings are especially significant for company car drivers paying a higher rate of tax.

The value of this is calculated in the same way as for other company cars 1 with the following differences for pure electric cars. Using the hmrc calculator choose fuel type f for diesel cars that meet the euro 6d standard. Therefore for a pure electric vehicle with zero tailpipe emissions company car drivers will be taxed at 0 and pay no tax on the benefit in kind bik at all. Switching to electric company cars can bring many benefits including less bik tax for your employees.

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. For employers looking into electric company cars there are now considerable savings to be made. 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. This zero rate also applies to hybrid vehicles with emissions from 1 50g km and a pure electric range of over 130 miles.

Company car tax on electric cars electric cars are becoming more popular and more accessible as each year goes by. 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. If an employer provides an electric car to their employee a taxable benefit in kind will arise. Or you can use hmrc s company car and car fuel benefit calculator if it works in your browser.

This is compared to a maximum of 37 charged on the least co2 efficient vehicles. This is the distance the car can go on electric.