Are trends electric? Upcoming changes to company car taxation
At present only 1% of new cars sold in the UK are fully electric, and although the figure for hybrid cars is higher the Government still looks to have lots to do if it is to achieve its stated target of net zero emissions by 2050. However changes to the taxation of company cars from April 2020 may help to accelerate the change to electric.
For the 2020/21 tax year there will be no benefit in kind charge on electric cars or on hybrid cars capable of driving at least 130 miles on a charge (and having emissions of less than 51g/km).
Unfortunately the zero percentage used to calculate taxable benefits only lasts for one year. For 2021/22 the rate increases to 2% of list price and for 2022/23 it goes up further to 3%. In addition, for both of these years, hybrid cars must be capable of travelling 150 miles on a charge.
Even with these tax breaks the appeal of electric cars may be limited at present, but with motor manufacturers devoting huge resources to the development of electric cars it may not be that long before they become an attractive option.
In certain circumstances there could even be a strong argument now for taking advantage of the forthcoming nil/low rates. If you wish to know more please contact us.
In the meantime why not take a look at our Guide to Business Motoring.
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