I may be showing my age, but I remember seeing one of the first electric cars on Blue Peter and laughing at it for the following reasons:
A) what it looked like
B) the fact it only went 10 miles!!!
Needless to say, unlike my yearning for a gold Blue Peter badge, we have moved on and the electric car is becoming increasingly popular. Up to the end of August 2019 there were approximately 227,000 electric cars registered in the UK.
So, with the government wanting to encourage the use of low or zero CO2 omission vehicles, how are they incentivising this?
New or unused low or zero omission cars purchased before the 1st April 2021 qualify for the first-year allowance, meaning 100% of the cost of the vehicle can be offset against the profits of the company.
The percentage at which a benefit in kind is taxed is based on the CO2 omissions of a vehicle. For 2019/20 the taxable benefit in kind percentage for low or zero omission car is 16% of the list price of the vehicle. However, from April 2020 this will be reduced to 2% for pure electric.
If the vehicle is charged at work, there is no taxable benefit and moreover 100% of the first-year allowance is available for the cost of installing a charging point at the workplace.
If the employee charges their vehicle from their home power supply, then there is a mileage allowance available at 4p per mile.
As it is uncertain what governments polices will be in place regarding electric cars after 2021, but it would appear that the tax year 2020/21 is the optimum time to purchase an electric car. With the first-year allowances and the benefit in kind percentages available this may be the perfect time to ditch the petrol stations and embrace electric.
Wouldn’t it be wonderful to start saving money as well as saving the planet?