The tax benefits of switching your company car to electric

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The tax benefits of switching your company car to electric

Fully electric vehicles will be exempt from company car tax from April as part of a range of measures aimed at encouraging businesses to switch to green fleets.

Company car drivers will pay zero benefit in kind tax on electric vehicles from 6 April 2020 until 5 April 2021, rising to just 1% from April 2021 and 2% from April 2022. Grants are also available for charging points at home and work.

At the moment, many employees choose to opt out of company car schemes because of the personal tax liability. This means businesses are missing out on the benefits of having a company car scheme which include capital allowance reliefs, tax deductible repair and maintenance costs and reclaiming VAT, as well as using the company car scheme as an incentive to potential new employees.

Where companies purchase rather than lease their electric fleet vehicles, they will enjoy a 100% first-year allowance, giving full tax relief on the cost of the car in the year of purchase.

All in all, going green is good for business as well as the planet.

If you’d like to find out more about electric vehicles in general, the grants available for charging points and have a chance to test drive a selection of electric cars, Ethos Finance are holding an electric vehicle showcase day at Rudding Park on Friday 3rd April. Contact Rosie@ethosfinance.co.uk to sign up.

 

 

 

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