January 06, 2020 | No Comments
As mentioned in our update on the benefit-in-kind (BIK) rates for company vehicles, pure electric cars will be given a 0% tax rate from 6 April 2020.
For companies who are considering moving to fully electric vehicles, this will provide excellent benefits to employees going forward. We’ve seen in the last few years that there has been increasing interest in electric vehicles, together with a desire for businesses to further reduce emissions. The transition has been slow so far due to uncertainty regarding the Government’s stance and how that would change in the future. However, with rates now being published up to 2022/23, we have clarity!
For electric cars with no emissions and new hybrid models with low emissions, the reduction to 0% from 6 April 2020 is a positive improvement on the 2% rate that was previously published. This applies to vehicles registered on or after 6 April 2020. An increased rate will, of course, eventually come in, with newer cars rising to 1% and 2% respectively over the following years, but it’s still an attractive rate. For vehicles registered prior to 6 April 2020, the 0% rate will still apply for pure electric vehicles, but for low emission hybrid cars the 2% rate remains.
When considering the additional 4% surcharge for diesel cars, plus how the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) will measure fuel consumption and CO2/pollutant emissions, the move to electric is further incentivised.
Calculating the savings to your employees, or even as an employee, is an important first step. Read more about the future rates in our update here or drop us a line to get the big picture on going electric.