Elevate Your Company Car Benefits with Electric Vehicles – All You Need to Know About Benefit in Kind Tax
Electric vehicles are all the rage right now, and for good reason. As we become increasingly aware of the harm that fossil fuels have on our environment, people are turning to electric vehicles as a more sustainable option. Company cars are just one area that has seen a massive shift toward electric vehicles in recent years, and it’s not hard to see why.
From reducing emissions to cutting costs and boosting employee satisfaction, the benefits of electric company cars are numerous and varied. In this blog post, we’ll take a closer look at just what makes electric company cars such a smart choice for businesses of all sizes.
Reduced Benefit in Kind Tax
If you’re considering going electric with your company car, you could see a significant reduction in your Benefit in Kind Tax. The government has introduced a system that rewards drivers of electric vehicles with lower tax rates than those of petrol or diesel vehicles. This means that if you opt for a fully electric company car, you’ll pay a lower Benefit in Kind Tax rate than you would with a traditional petrol or diesel car.
This reduction could save you a significant amount of money over the course of the year. Not only will you save on tax, but electric cars have lower running costs and are generally more environmentally friendly than their petrol and diesel counterparts. By choosing an electric company car, you’re not only saving yourself money, but you’re also helping to protect the planet.
So why not make the switch today and enjoy the benefits of reduced Benefit in Kind Tax and a cleaner, greener driving experience?
Electric Cars Qualify for Lower BIK Rates
If you’re in the market for a new company car, opting for an electric vehicle could mean you qualify for lower Benefit in Kind (BIK) tax rates. The UK government is keen to encourage more people to switch to electric vehicles, and one way they’re incentivising this is by reducing the BIK tax rates for electric cars. From April 2020, electric cars with zero emissions will attract a BIK rate of just 0%, rising to 1% in April 2021 and 2% in April 202
This is great news for those looking to reduce their tax bill, and also demonstrates the government’s commitment to reducing CO2 emissions and improving air quality. So if you’re considering a new company car, why not consider an electric vehicle and take advantage of these reduced tax rates?
Company Car Drivers Save Money
As a company car driver, did you know that you can save money through reduced Benefit in Kind tax? This tax is based on the car’s list price, its fuel type, and CO2 emissions, and it can add up to a substantial amount. However, by choosing a car with lower emissions and using it solely for business purposes, you can reduce your benefit in kind tax. This means you get to keep more of your hard-earned money in your pocket.
It’s like getting a discount every time you pay tax. So, the next time you’re choosing a company car, make sure to factor in the benefit in kind tax you’ll be paying. By going for a car with lower emissions, you could save thousands of pounds over the car’s lifetime.
It’s a no-brainer!
Improved Sustainability
When it comes to company car benefits in kind, electric vehicles are becoming an increasingly popular option due to their improved sustainability. As we become more aware of the impact that our actions have on the environment, there is a growing desire to reduce our carbon footprint. Electric cars are a great way to do this, as they emit significantly less CO2 than petrol or diesel cars.
This not only benefits the environment, but it can also save money in the long run. With the government incentivizing the switch to electric cars, many companies are now offering their employees the option to drive an electric car as their company car. This is a positive step towards creating a more sustainable future, and the trend is set to continue as more people become aware of the benefits of electric cars.
So, if you’re considering a new company car, why not look into the option of an electric vehicle and do your part for the environment?
Reduced Carbon Footprint for Businesses
One of the most pressing concerns of businesses today is reducing their carbon footprint. Companies across industries are becoming increasingly aware of the need to operate sustainably, both for the sake of the planet and to appease consumers who prioritize eco-friendliness when making purchasing decisions. The good news is that reducing your business’s carbon footprint doesn’t just benefit the environment – it can also help your bottom line.
By implementing energy-efficient practices, reducing waste, and sourcing materials responsibly, you can save money on utilities, streamline operations, and improve your brand’s reputation. Taking steps toward sustainability is a win-win for both your business and the planet.
Electric Cars Contributing to a Greener Future
Electric cars have become increasingly popular in recent years, thanks to their significant impact on our environment. These vehicles use electricity as their main source of energy, reducing carbon emissions and contributing to a greener future. By adopting electric cars, we can improve sustainability, and reduce our reliance on fossil fuels.
Additionally, these cars’ rise in popularity has led to significant advances in battery technology, which has resulted in longer-lasting batteries that can travel further distances. This means that electric cars are not only better for the environment but also more practical and convenient for everyday use. If we all make the switch to electric cars, we can play a significant role in reducing greenhouse gas emissions and improving the overall health of our planet for generations to come.
Cost Savings for Businesses
One of the major benefits of electric cars, especially for businesses, is the cost savings they offer. When compared to traditional petrol or diesel cars, electric vehicles require much less maintenance since they have fewer mechanical parts that can wear out or break down. They also offer significant savings on fuel costs as electricity is much cheaper than fossil fuels.
For companies that provide a company car benefit in kind, electric cars can also be a more cost-effective option since they have a lower benefit-in-kind (BIK) tax rate. This is due to their lower emissions and the government’s efforts to encourage the adoption of electric vehicles. So not only are electric cars better for the environment, but they can help businesses save money too.
Lower Fuel and Maintenance Costs
As a business owner, it’s vital to keep an eye on expenses. One area where costs can quickly add up is fuel and maintenance for company vehicles. That’s why incorporating electric or hybrid vehicles into your fleet can be a smart cost-saving move.
With lower fuel costs – and in some cases no fuel costs – you can potentially save thousands each year. Plus, electric or hybrid vehicles require less maintenance, meaning fewer trips to the mechanic and fewer expenses. This can help free up capital to invest in other areas of your business.
So, why not consider making the switch? You could be pleasantly surprised by how much you can save in the long run.
Increased Efficiency and Productivity
Cost savings for businesses can be achieved by implementing measures to increase efficiency and productivity. By streamlining processes and eliminating redundancies, businesses can reduce waste and save money. This can be done through a variety of means, such as improved automation and technology, better training and development of employees, and more effective communication strategies.
For example, automating certain tasks can free up employees’ time and enable them to focus on higher-value tasks, while providing more training opportunities can help employees become more skilled and productive. Additionally, better communication can help ensure that everyone is on the same page and working towards the same goals, reducing confusion and errors. Ultimately, these efforts can help businesses save money and achieve greater success in the long run.
So, if you want to see your business grow while saving costs, investing in your employees and adopting technology can be the path forward!
Government Incentives for Electric Company Cars
If you’re considering an electric vehicle (EV) as your company car, you may be eligible for government incentives that can make the transition more cost-effective. Currently, the UK government offers several incentives for both individuals and businesses who choose to drive electric. One of the most significant incentives is the reduction in a company car’s benefit in kind (BIK) tax.
Essentially, BIK is a tax on the value of any non-cash benefits given to employees, including company vehicles. In the UK, BIK tax is based on the car value, CO2 emissions, and fuel type. However, electric cars are exempt from BIK tax for the 2020/2021 tax year, and the tax paid afterward will typically be significantly lower than a petrol or diesel car, making EVs an excellent choice for company cars.
Additionally, companies can claim up to £350 for installing a home charging point for EV drivers, and the government provides grants of up to £3,000 off the cost of a new EV in the Plug-in Car Grant. So if you’re considering an electric company car, it’s worth taking advantage of these incentives that can save you money and reduce your environmental impact.
Plug-in Grant Scheme for Eligible Vehicles
If you’re considering purchasing an electric company car but are hesitant due to cost concerns, the UK government offers a plug-in grant scheme to incentivize the transition to low-emission vehicles. The grant provides a discount on the cost of eligible vehicles, making them more affordable for businesses to incorporate into their fleets. The grant covers up to 35% of the purchase price, up to a maximum of £3,000.
To qualify, the vehicle must meet certain criteria, such as having CO2 emissions less than 50g/km and a minimum zero-emission range of 70 miles. In addition to the plug-in grant scheme, electric company cars have lower emissions than conventional vehicles, resulting in potential savings through reduced fuel and maintenance costs. By taking advantage of government incentives, businesses can make a positive impact on the environment and their bottom line.
So why not consider making the switch to an electric company car and take advantage of the cost-saving opportunities available?
Conclusion
In conclusion, the company car benefit in kind electric is a shining example of how businesses can adapt to changing times while still prioritizing the well-being of their employees. Not only does it promote eco-friendliness and a reduction in carbon emissions, but it also provides a sleek and modern alternative to traditional company vehicles. Plus, let’s face it – who wouldn’t want to cruise around in a cutting-edge electric car on the company’s dime? All in all, opting for an electric company car benefit in kind is a smart and forward-thinking move that benefits both the company and its employees.
It’s a win-win situation, and we can’t wait to see more businesses make the switch. Let’s make the future greener, one car at a time!”
FAQs
What is a company car benefit in kind?
A company car benefit in kind is a type of benefit offered by employers to their employees, where the employee is provided with a car for business and personal use as part of their employment package. The employee is taxed on the value of the benefit, which is determined by the CO2 emissions and list price of the car.
How does an electric company car benefit in kind differ from a traditional company car benefit in kind?
An electric company car benefit in kind is environmentally friendly and benefits from lower tax rates due to lower CO2 emissions. The government offers incentives to encourage the use of electric cars as company cars, such as 0% tax rates for fully electric vehicles.
What are the tax implications of a company car benefit in kind for the employee?
The tax implications of a company car benefit in kind for the employee depend on the CO2 emissions and list price of the car provided by the employer. The employee is taxed based on a percentage of the list price of the car, based on the CO2 emissions. The higher the CO2 emissions and list price of the car, the higher the tax rate for the employee.
Can an employee choose the type of car for their company car benefit in kind?
In most cases, the employer chooses the type of car for the company car benefit in kind. However, some employers may offer a choice of cars from a pre-approved list or allow the employee to choose the car as long as it meets certain criteria, such as CO2 emissions and list price.
