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Employees who drive electric company cars can feel short-changed, as they charge-up at home, but don’t get reimbursed for the power used on business journeys. Now employers can reimburse drivers of electric company cars up to 4p per mile for each business mile driven since 1 September 2018, with no tax implications.

What’s more, the company can allow employees to charge company or privately owned electric vehicles at the company’s premises for free, without incurring a taxable benefit.

The downside of having an electric company car is the high taxable benefit, currently calculated as 13% of the vehicle’s list price when new. This is due to rise to 16% of the list price for 2019/20, but strangely will drop back to 2% from 6 April 2020. If you are thinking of taking on an electric company car, you will save tax if you wait until 2020.

When you change your company car for a different model you should report this to HMRC through your online personal tax account (www.gov.uk/personal-tax-account). The employer is only required to inform HMRC when the employee is provided with a company car for the first time, or the car is withdrawn.

If you are provided with an electric van by your employer, you will be taxed on £1,340 for using the van on private journeys, other than commuting. This taxable benefit is likely to rise to around £2,000 for 2019/20, which is considerably less than the taxable benefit for having an electric car.

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Clarke Nicklin House, Brooks Drive, Cheadle Royal Business Park, Cheadle, Cheshire, SK8 3TD. Registered Number OC309225.
The firm is registered to carry on audit work in the UK & Ireland. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001178544. The professional rules applicable are the Audit Regulations and Guidance which can be found at www.icaew.com/regulations, and the International Standards on Auditing (UK and Ireland) which can be found at www.frc.org.uk/apb/publications/isa.cfm.