Over the last decade or so, electric vehicles have been the number one choice for those with a strong social and environmental conscience. But an increase in the availability of electric options, and the financial benefits to be had in choosing these over traditional petrol and diesel models, means that numbers are set to soar.
Businesses have already proved to be the most serious early adopters of electric vehicles (two-thirds of the total on our UK roads are currently registered to companies). No surprise considering that in the budget it was announced that there would be zero tax applied to electric cars from April 2020.
For company car drivers this is a big deal. The 0% Benefit in Kind tax rate (which applies to both existing zero-emission company cars and those delivered this year) means there’s a significant monthly saving to be had. For instance, on a typical fleet model such as the BMW 3 series with a 2-litre diesel engine, a business user could have previously paid anywhere between £2000 and £4000 per year in BIK, depending on their tax band.
And whilst the zero-tax rate might only be in place for the April 20 to Mar 21 financial year, there’s no risk of losing this incentive in the medium term either. The Treasury has already announced the rates for the following 2 years too, in order to allow businesses to plan for fleet lifespan. With 1% BIK applicable to electric vehicles in 21/22 and 2% the year after, the tax implications are still vastly more attractive than those for diesel or petrol engine counterparts.
Business owners have even more to gain. Since all-electric vehicles have CO2 emissions of less than 50g/km they are also eligible for 100% first-year capital allowances and the full cost can therefore be deducted from pre-tax profits. There are savings to be made on on-going expenses too, with road tax being free for the first 12 months and charges being significantly reduced for those regularly travelling in congestion charge and clean air zones.
The financial incentives to buy or lease an electric vehicle are undeniable so what are the drawbacks? Well, in the not-too-distant past we might now have had to discuss unfeasibly large purchase prices or the very limited choice of models available, but this is certainly no longer the case. The high number of new players entering the market, along with enthusiastic renewed interest from the big manufacturers, means that there are options for all, and prices are coming down.
The electric car is no longer a novelty. With many having a range close to 300 miles between charges and charging points becoming more readily available, these vehicles can meet the needs of the average business driver and deliver some financial benefits to boot.
At 360 Autoleasing our aim is always to help our customers make the choice which is best for them. That’s why we are always happy to discuss the range of options, helping you and your business get the vehicles you want whilst keeping an eye on short term and longer-term costs.
Get in touch or visit our website at https://www.360autoleasing-leicestershire.co.uk to make an informed choice on your motoring needs.
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