Shropshire firms turn to electric vehicles to maximise tax benefits
Company car drivers and their employers in Shropshire are increasingly turning to electric vehicles to maximise their tax benefits and save thousands of pounds.
The Government plans to ban the sale of new cars powered only by petrol or diesel engines by 2030, and according to Elwyn Turner, a director at Dyke Yaxley Chartered Accountants in Shrewsbury, businesses are already seeking out electric alternatives.
“There is now a real wave of companies considering electric vehicles as they have now become a commercially viable option thanks to the increase in range and the models available.
“Lately the number of employees taking up the offer of a company car had been declining due to the increasing taxation on them as a benefit.
“But now, thanks to the rules on electric vehicles and the significant reduction in taxable benefit in kind for the employee switching from a petrol or diesel-fuelled company car to outright electric, they are once again being regarded as a realistic perk.”
Elwyn said the Government offered grants against the cost of new electric vehicles, but this week had reduced the amount available from £3,000 to £2,500, and the payment was now restricted to cars costing under £35,000.
“With the rapidly rising number of charge-points across the UK, and the growing interest in electric powered vehicles, the Government said they wanted to re-focus the grants on the more affordable zero emission vehicles.
“They believe that higher-priced vehicles are typically bought by drivers who can afford to switch to electric vehicles without a subsidy, and that the changes will allow the funding to go further.”
Elwyn said employers could also benefit from switching to more eco-friendly vehicles, particularly as charge-points at work qualify for accelerated capital allowances as well as the new “super capital allowance deduction” announced in the latest Budget – and the accelerated tax reliefs for the purchase of the cars were also of significant interest.
“If your employees do plug in and charge their company-provided vehicles at your company premises, they will not be liable for benefit-in-kind payments either. And if you provide charge-points at your employees’ homes, they are also free of a taxable benefit if they are provided alongside the company car.
“So if you’re already running a company car scheme through your business, now is the perfect time to review and update the list of vehicles offered to your employees so that you can make sure you’re maximising the allowances available.”
