Electric cars are rapidly growing in popularity, and it has been predicted that by the end of 2022, they will outsell both diesel and mild hybrid diesel vehicles. Because of this, investment into the sector is booming, and whether you’re a business owner or employee, you might be wondering whether switching to an electric company car might be beneficial. Electric cars come with a huge number of benefits for business owners and employees alike, so in this guide, we will be discussing the top reasons for making the switch.
Immediate Cost Savings
When you’re searching for your next vehicle, the price you’ll pay is likely going to be a key factor, especially if you’re looking for an appropriate company car. With electric vehicles, you’ll benefit from immediate cost savings when you make a purchase, thanks to the ‘plug-in grant’. When you purchase an eligible vehicle, such as a van or wheelchair-accessible car, the dealer will automatically deduct up to £2,500 from the final purchase price, making the switch to an electric vehicle a no- brainer.
Benefit In Kind Savings
For employees, driving the right company car is a vital component of successful working practice. Often, employees will be driving hundreds of miles a week, and if this is something that you will be doing week in, week out, it is important that you make the best choice about how you get around. Electric vehicles are a great option for employees, particularly for their low benefit in kind (BiK) rate.
For 2022-23, pure electric vehicles are rated at just a 2% tax rate, and this rate will remain in place until at least the end of the 2025 tax year. As a result, leasing or buying an electric car is a highly tax- efficient choice for individuals searching for benefit in kind savings. This is particularly true when the BiK rate of electric cars is compared to that of other vehicles. When calculating the tax rate of vehicles with conventional combustion engines, the rate of emissions is used to calculate the final figure – for the most polluting vehicles, this rate can reach as high as 37!
Easy, Cost-Effective Charging
An often-misunderstood element of electric vehicles is the way they are charged. Unlike cars with conventional combustion engines, electric cars are charged through a dedicated charge point, which needs to be installed at an employee’s home or their workplace. Because of this, many people write-off the prospect of electric company cars, without looking into the ease at which these charge points can be introduced. There are some key ways that you can bring down the cost of charging your vehicle:
For Employers
If you are a business owner, you can install electric charging equipment at your business premises and claim 100% first year allowances on the cost, meaning you won’t be out of pocket. If you do this, your employees won’t face any Benefit in Kind, even if they use the charge they acquire outside of working hours or during their personal time. This is the case not only for company cars, but also for employees who charge their own electric cars on site.
For Employees
If you would rather charge your vehicle at home, or your employer doesn’t offer an electric charge point on their premises, you’ll still be able to take advantage of the cost savings of these revolutionary vehicles. Your employer will be able to install a charge point at your own home that isn’t classed as a Benefit in Kind – you will only pay tax on the electricity used for private mileage once it’s fitted.
Even if your employer isn’t willing to provide you with a charge point, you can still utilise the EV Chargepoint Grant, through which the government will contribute 75% of the cost of charge point installation, up to the value of £350 including VAT.
An Environmentally Friendly Choice
On top of the extensive cost savings, both employers and employees can rest assured that they will be making an environmentally friendly choice when they opt for an electric vehicle. With no tailpipe emissions, these cars are much more sustainable than conventional models, and play a huge part in the UK’s ambitions to make every personal vehicle electric by 2030. To find out more about the benefits of switching, you can get to know the electric car basics online, including the positive difference you can make to the environment, before you make a decision.
While a huge number of employers still offer vehicles with combustion engines as employee company cars, electric models offer a huge range of benefits for employers and employees alike. From the more immediate cost-savings available through the plug-in grant, to the Benefit in Kind tax rate savings and easy charging capability, there has never been a better time to upgrade your daily commute. When you factor in the positive environmental impact that electric vehicles offer, making the switch is a fantastic choice no matter your circumstances.
