As the effects of the pandemic are easing in the UK and more people are going back to the office, you may want to consider switching your current car to an Electric Vehicle.
Electric vehicles (EVs) and Hybrid vehicles are becoming a much more viable vehicle option as more charging points are installed, and more affordable electric vehicles are appearing on the market.
As well as being considered cleaner and better for the environment, EVs also come with several tax incentives to help individuals and businesses choose electric over petrol or diesel.
Vehicle (Road) Tax
- If you have a purely electric car, these are exempt from vehicle tax, meaning that it’s free to tax them
- If you have a hybrid car, these are still liable for vehicle tax which can cost anything from £0 to £135 per year depending on the levels of CO2 emissions produced by the individual vehicle.
Benefit in Kind (BIK)
- The BIK charges for an electric vehicle are significantly lower than for petrol or diesel vehicles. For the tax year 2021-2022, fully electric cars only have a BIK charge rate of 1% of the list price of the vehicle (however this will increase to 2% for tax years 2022-2023, 2023-24 and 2024-25).
- Electric cars are exempt from congestion charge, which is great for anyone who must regularly travel in and out of cities and clean air zones. The current congestion charge in London is £15 per day per vehicle, so for those who have to regularly travel to London could make a big saving by switching to electric.
- Cars with CO2 emissions of less than 50g/km are also eligible for 100% first year capital allowances. Therefore, this means that with electric cars you can deduct the full cost from your pre-tax profits.
The Office for Zero Emission Vehicles (OZEV) is currently offering four grants to help fund electric cars and EV chargers:
- Plug-in Car Grant/Plug in Van Grant (PICG/PIVG) – a discount given when buying a new low-emissions car or van, with a wide range of grants available for different price ranges of car and even motorcycles and mopeds (https://www.gov.uk/government/news/government-funding-targeted-at-more-affordable-zero-emission-vehicles-as-market-charges-ahead-in-shift-towards-an-electric-future).
- Electric Vehicle Homecharge Scheme (EVHS) – provides grant funding of up to 75% towards the cost of installing charging points at home.
- Workplace Charging Scheme (WCS) – is a voucher based scheme that helps businesses with the up-front cost of EV charge-points purchase and installation.
- On-street Residential Chargepoint Scheme (ORCS) – support for local authorities looking to install on-street residential car chargers.
For further advice or guidance on whether getting an Electric Vehicle is right for you or your business, please don’t hesitate to get in touch.