Electric Company Cars Tax Tips
Posted on 6th August 2022
The government continues to encourage drivers to make the switch to electric vehicles and no doubt whilst on your holiday travels over the summer you will have seen more and more electric vehicles and public charging points.
Tax savings on Electric Company Cars
For the tax year commencing 6 April 2022, a vehicle with zero CO2 emissions will only be 2% of the list price for 2022/2023 and is expected to remain at 2% until 2024/25. Compare this to the top percentage rate on a diesel car which could be as much as 37% of the list price! Don’t forget, if you choose to lease any car, you may only claim 50% of the VAT charged on the leasing element of the agreement. This is to account for private usage.
Additional benefits
In addition to this, businesses have been able to claim 100% of the cost of an electric vehicle against the profits of the year of purchase and there are no restrictions on the value of the vehicle. And businesses can benefit from the new super-deduction, which offers 130% first-year allowance on qualifying electric charging points for cars and vans. To qualify for the relief the company must use the charging point in their own business. This will last until 31 March 2023.
And the benefits do not stop there
For any business miles travelled in the car, HMRC also allows the employee to claim mileage allowance of up to 4p a mile. There is also no tax charge for the employee if the company allows them to charge their company vehicle at work.
So if you are considering buying a new car, maybe an electric car could be top of the agenda.
For more information about Benefit in Kind tax on company cars, call the team at Holmes and Company on 01525 851101 or contact us here
The tax tip is provided for general guidance only; further advice should be sought, for specific issues.
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