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If you are considering acquiring a new company car, take account of the changing tax incentives for electrics.
The taxable benefit for having an electric company car is currently calculated at 13% of its list price when new, but this will rise to 16% on 6 April 2019. Strangely, from 6 April 2020 the taxable benefit for driving an electric company car will drop to 2% of its list price.

Where a business buys a new electric car it can claim 100% of the cost as a capital allowance in the year of purchase, if the car is acquired before 1 April 2021. So 2020/21 will be the sweet spot for acquiring electric company cars.

If a business installs electric vehicle charging points before 31 March 2023 it can claim 100% of the cost in the year.

Where employees are permitted to freely charge up electric vehicles at work, there is no taxable benefit for the use of that free electricity. Drivers of electric company cars who pay for their own charging can claim a tax-free allowance from their employer of 4p per business mile driven.

Drivers who use their own electric cars for business journeys can claim the normal mileage rates of 45p per mile for the first 10,000 miles and 25p for any additional business miles driven in the tax year.

Action Point!
Consider the tax incentives for electric company cars in future years.

By |2019-03-28T10:25:39+00:00March 28th, 2019|News|