In this article…
We dive into the specifics of taxing an electric company car, outlining why EVs are a financially savvy choice for your business.
For limited companies and sole traders, electric cars represent an exciting premise. Because of their environmentally-friendly output which the British government takes a liking to, electric vehicles (EVs) are not just a leap into modern technology but also a potentially advantageous tax situation.
This article dives into the specifics of taxing an electric company car, outlining why EVs are a financially savvy choice for your business.
How Do I Tax an Electric Company Car?
The process of taxing an electric car is the same as a petrol or diesel company car, but you will find that electric company cars bring many forms of tax relief. If you want more information on how to get a business car on lease, including the finer details of company tax, read our guide to getting a business lease or personal hire car.
Are Electric Cars Tax Deductible?
Yes, electric cars come with substantial tax advantages. One key aspect is the low benefit-in-kind (BiK) rate. As of 2023, the BiK for an electric vehicle emitting 0g/km of CO2 is just 2%. This rate is expected to remain stable for the 2023/24 and 2024/25 financial years. This low BiK rate significantly reduces the tax burden for employees who receive an electric company car on top of their salary.
Moreover, electric vehicles offer reduced running costs. Charging an EV is notably cheaper than fueling a conventional car, and there’s no BiK for charging expenses. This makes EVs a more tax-efficient option compared to fossil fuel-powered vehicles.
Electric Company Cars and Leasing
Business leasing of electric cars is as appealing as traditional vehicle leases, with the added benefit of low BiK and other taxes. When you lease an electric car for business, you can enjoy tax relief on every monthly payment throughout the lease period. This makes it an economically attractive option for businesses.
How Do Electric Cars Fare as Part of the Fleet?
Integrating electric cars into your business fleet can be a smart move. As long as there’s a reliable charging infrastructure, commuting with an electric car becomes incredibly convenient and efficient. For business owners, transitioning to an electric fleet can be as simple as installing charging stations in your parking area. This not only reduces operational costs but also enhances your company’s environmental credentials.
Wanting to do away with fossil fuel consumption and switching your company car to electric? At cars2buy, we are the UK’s favourite online site for comparing the best electric car business leases. Our transparent service searches the web for quality business lease offers from trusted dealerships, allowing you to effortlessly compare, search, and filter to find the lease that suits you best. Our approach simplifies the search for a business lease, and we do it all without any additional payment on your lease deal. Browse our selection of electric car business leases today, and you might find the perfect offer sooner than you think.
