Company car tax may not be the highest thing on your business’ agenda right now with the current climate the world finds itself in. However, while the world may have been clouded over by a pandemic in recent months, as more and more things are returning to normal it is a great time to be considering how you can make your business more efficient and how you can be saving money.
If you are considering a company car or even a fleet for your employees, it is worth considering going electric for the number of savings to be had in several areas.
How Can My Business Benefit from an Electric Vehicle
Savings to be made vary depending on the circumstances of your own business, but we’ve listed a few initiatives here that are sure to spark a few thoughts to consider:
Benefit in Kind
From 6 April 2020 to 5 April 2021, employees who use a company car for personal trips will benefit from 0% tax on the benefit in kind. This could be a major company car tax benefit directly for your employee.
Benefits in kind are benefits that an employee or director of a company that sits outside their regular salary. They can be referred to as perks of the job, but they are still taxable regularly.
Making Electric vehicles 0% taxable for the year could be a huge saving passed on to your employee.
Even if this benefit only has a few months left on it when your vehicle is ready to drive, from 6 April 2021, this rate only goes up to 1%.
Employees can also benefit further – as electricity is not classed as a road fuel, there is no fuel charge tax to pay meaning more net pay.
Benefits for employees are good for business. Motivated employees want to do the best for their company.
100% First Year Allowance
This is a big one for your company. For electric vehicles, the first-year allowance can be claimed by your business for up to 100% of the vehicle. This allowance is the same for electric vehicles that are new and for electric vehicles that are considered new but have been used (a registered vehicle used as a demo vehicle for example).
Making use of this could have a significant impact on your bottom line in the year allowed for. What’s even better, this allowance has been extended to March 2025 as you plan to grow your business and its vehicles.
Further business savings
It’s not just tax purposes that mean your business can save. Other grants are available to encourage businesses to invest in an electric vehicle future:
For vehicles that cost under £50,000 as standard, your business can claim a grant of £3,000 from the Office for Low Emission Vehicles (OLEV). This is an excellent reward for going green.
Charging point grant
If you have electric vehicles at your business, you’re going to need charging points for them. As well as the Plug-In Grant, OLEV also offers grants towards the install of an electric vehicle charging point. A grant of £350 is available for each charging point and business can apply for up to 20 of them. That equates to a potential of £7,000 in grants for your business.
Get in touch
The numbers can really add up for businesses looking to invest in going electric. And Go Electric is here to advise you on how your business can benefit.