With the recent fuel crisis in mind, more drivers than ever are considering investing in an electric vehicle. These advantages increase for those who choose to go electric for their company vehicle as the taxable benefit for this is currently only 1% of its list price. There is also zero taxable benefits for using an electric company van.
Are The Electric Vehicle Benefits Changing?
As of the 6th of April 2022, the taxable benefit for electric cars will rise from 1% to 2%; this will then be frozen at this level until at least the 6th of April 2025.
For businesses who pay for the electricity to power their company vehicles, whether this may be through on-site charging points or a payment card for employees, there will be no taxable benefit for any electricity used.
Should employees charge their company vehicle at home, 5p per mile can be claimed for business journeys driven from the 1st of December 2021. This is a slight increase from the previous 4p per mile.
If your electric vehicle is in your name rather than your employer, you can still claim the standard amount per mile for business journeys. This will be capped at up to 10,000 miles per year, but there will be no road tax (VED) to pay.
Where your company has the finances available to buy an electric vehicle, you can enjoy a 100% deduction for the cost in the year of purchase. Electric vans will also qualify for a 130% deduction.
There are also Government grants in place, including £2,500 towards the cost of cheaper electric cars or the installation of your charging point.