Tax benefits of driving an electric vehicle for you and your business

IF YOU are planning to use your electric car for business, you may find that the government’s multiplicity of incentives makes acquiring a plug-in vehicle highly attractive.

Tax benefits of driving an electric vehicle GETTY

Government incentives can make acquiring a plug-in vehicle highly attractive

The following incentives are available to business (some of them only for pure electric vehicles others for certain plug-in hybrids):

• 100% First Year Allowance for business owners (available until April 2021): this is claimable for up to 100% of the cost of qualifying low emission and electric cars.

So if you buy a new fully electric car as your company car, your business has the ability to claim a 100% year one deduction for the cost of the vehicle.

The First Year Allowance is applicable to new vehicles only, and those considered new despite previously being used – for example, vehicles registered as a sales or service demonstrator by the manufacturer.

UK Plug-in Car Grant of £4,500 for cars GETTY

UK Plug-in Car Grant of £4,500 for cars

• UK Plug-in Car Grant of £4,500 for cars and 20% of the purchase price for commercial vehicles up to a maximum of £8,000 - click here for more details.

• Reduced Car-Related Employer Class 1A National Insurance Contributions (company cars only); salary sacrifice scheme available to business drivers

• Significantly Reduced BiK Taxation for Company Car Drivers

• No car fuel benefit for company cars, even if recharging your car at work or using a company credit card or company membership to pay for your electricity

London Congestion Charge GETTY

100% discount off London Congestion Charge (discount application required)

• HMRC mileage claim remains the same as petrol/diesel cars (45p/mile for the first 10,000 per year, then 25p/mile)

• Scottish customers can enjoy interest-free loans of up to £35,000 (personal) or up to £100,000 (business)

• 100% discount off London Congestion Charge (discount application required)

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