01224 208729 info@fyfemoirassociates.com First Floor, 5 Abercrombie Court Prospect Road Arnhall Business Park, Westhill, AB32 6FE

Electric Switchover – The Benefits

• There is a Government ‘plug in’ grant of up to £3,000 or 35% of the purchase price if lower, off the cost of acquiring a new car with CO2 emissions of less than 50g/km. It must have an electric mileage range of 70 miles or more and the recommended retail price (Including delivery fees and VAT) is less than £50,000.

• The car benefit charge for a pure electric car for the 2020/21 tax year is nil. For the 2021/22 tax year it will be 1% of the list price (2% for 2022/23 – 2023/24 inclusive 2%).

• If an employee has a company car provided by their employer under a salary sacrifice arrangement, the taxable benefit is usually the higher of the salary given up or the taxable car benefit. This is not the case if the company car has CO2 emissions of less than 75g/km.

• Businesses that install charging points at work for electric vehicles can claim 100% first year allowance.

• Employees can charge their own electric cars at the workplace with no benefit in kind tax charge ensuing. Note that if the employer pays for or reimburses the employee for charging up their own car away from the workplace the exemption does not apply. The charging point must be available to all employees. The same applies if the employee is simply a passenger in a car owned by say a friend.

• The cost of the business installing a charging point at the employees home where they have a company car is not liable to a benefit in kind charge. That would not be the case if it is regarding the employees own car.

• There is no car fuel benefit in kind charge for pure electric cars.

• If it is a company electric car, the employee, in respect of business mileage, can presently claim 4p per mile tax free.

• If it is an employee using their own electric car for business purposes, then presently, they can claim 45p for this first 10,000 miles and 25p for business mileage in excess of that.

• If the business pays for an electric charge card to allow the employee unlimited access to local authority vehicle charging points in respect of their company car, no taxable benefit would arise. This would not be the car if it was the employee’s own car.

• The vehicle excise duty (VED) rates for fully electric vehicles have been reduced to nil until at least 2025. Where the vehicle costs exceed £40,000 there is not VED expensive car supplement. There are reduced VED rates applicable to some plug in hybrid vehicles.

• Businesses can claim 130% Super deduction first year allowance for new electric cars purchased on or after 1st April 2021 and up to and including 31st March 2023.

• Scotland has two electric vehicle Interest free loan schemes, one for used electric vehicles (max. loan £20,000) and one in respect of new electric vehicles (max. loan £28,000). The latter is due to come to an end on 31st March 2021.

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