Benefit in Kind Electric Cars 2020: Tax-Savvy Choices!
Electric cars are becoming popular. Many people want to drive them. They are good for the environment. They can also save money. In 2020, the UK government made new rules. These rules help people who drive electric cars. This article explains the benefits of driving electric cars in 2020.
What is Benefit in Kind?
Benefit in Kind (BIK) is a tax. It applies to company cars. If you get a car from your job, you pay tax on it. This tax is based on the car’s value and its emissions. Lower emissions mean lower tax. Electric cars have very low emissions. This means you pay less BIK tax.
Why Choose Electric Cars?
There are many reasons to choose electric cars. Here are some of the main benefits:
- Lower Taxes: Electric cars have lower BIK rates.
- Environmental Benefits: They produce no emissions while driving.
- Cost Savings: They are cheaper to run than petrol cars.
- Quiet Operation: They make less noise than traditional cars.
BIK Rates for Electric Cars in 2020
In 2020, electric cars had very low BIK rates. The government set these rates to encourage electric car use. Here is a table showing BIK rates for different years:
| Year | BIK Rate |
|---|---|
| 2020/21 | 0% |
| 2021/22 | 1% |
| 2022/23 | 2% |
In 2020, the BIK rate for electric cars was 0%. This means you did not pay any tax. In 2021, the rate was 1%. In 2022, it will be 2%. It is still much lower than petrol cars.
How Much Can You Save?
Let’s see how much you can save with electric cars. Imagine you have a car worth £30,000. If you drive a petrol car, the BIK rate may be 30%. This means you pay tax on £9,000. If your tax rate is 20%, you pay £1,800 in tax.
Now, if you drive an electric car worth the same, your BIK is 0%. So, you pay no tax. This means you save £1,800 every year!
Other Benefits of Electric Cars
Electric cars have many more benefits. Let’s look at some:
1. Lower Fuel Costs
Charging an electric car is cheaper than buying petrol. The cost to charge is much lower. You can save a lot of money this way.
2. Government Grants
The UK government offers grants for electric cars. These grants help you buy a new electric car. In 2020, the government gave up to £3,000 for eligible cars.
3. Free Parking
Some cities allow free parking for electric cars. This can save you money. You may also find charging stations in these areas.
4. Lower Maintenance Costs
Electric cars have fewer moving parts. This means they need less maintenance. You will spend less money on repairs.
Charging Your Electric Car
Charging your electric car is easy. You can charge at home or at public stations.
1. Home Charging
You can install a charging point at home. This makes it simple to charge overnight. You wake up to a full battery.
2. Public Charging
Many places have public charging stations. You can find them in shopping centers and parking lots. Some are free, while others charge a fee.
Environmental Impact
Electric cars help the planet. They produce no harmful gases. This helps reduce air pollution. By driving electric, you help fight climate change.
Frequently Asked Questions
What Are Benefit In Kind Electric Cars?
Benefit in Kind (BiK) electric cars are vehicles that provide tax advantages for drivers. They are eco-friendly and often have lower tax rates.
How Does Benefit In Kind Tax Work?
BiK tax applies to company cars. The amount you pay depends on the car’s value and CO2 emissions.
What Are The Tax Rates For Electric Cars In 2020?
In 2020, electric cars had a low BiK tax rate of 0%. This made them very affordable for company car drivers.
Are Electric Cars More Expensive To Buy?
Electric cars can be pricier upfront. However, savings in fuel and tax can offset the initial cost.
Conclusion
Electric cars have many benefits. The Benefit in Kind tax is low in 2020. This makes them an excellent choice for many drivers. They save money, help the environment, and are cheaper to run.
If you are thinking about a new car, consider an electric one. It may be the right choice for you. Make sure to check the BIK rates and savings. Electric cars can be a smart investment for your future.
Final Thoughts
As we move towards a greener future, electric cars play an important role. They are good for you and for the planet. The benefits in 2020 are clear. Lower taxes, lower costs, and less pollution make electric cars a great option.
Consider your needs and budget. Look into the electric car options available. You may find the perfect car for your lifestyle.
