Excited about electrics
The taxable benefit for having an electric company car is currently nil, but from 6 April 2021 the taxable benefit will increase to 1% of list price, and to 2% for 2022/23.
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 2025. The electric car must be brand new and not second-hand to qualify for this 100% First Year Allowance.
If a business installs electric vehicle charging points before 31 March 2023, it can claim 100% of the cost in the year. There are also Government grants available for individuals who install electric vehicle charging points at their home.
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.
If you’re considering an electric car, speak to our Director, Gareth Jones, who discusses here the benefits to electric cars.
