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Reduced Company Tax

Introducing low emission vehicles to your fleet can significantly help your businesses tax profile

See how introducing BEVs and PHEVS can make a difference in your fleet costs

Alongside the benefits to the environment, transitioning electric vehicles into your fleet can also make significant savings to your businesses fleet costs.

The savings vary based on whether the vehicles are:

BEVs

Battery Electric Vehicles with zero emissions


Vehicle Excise Duty (VED)

All BEVs are exempt from VED costs until 2025.


Capital Allowances

Zero-emission vehicles are eligible for 100% first-year capital allowance.


Leasing Rental Disallowance (LRD)

Both BEVS and PHEVs are eligible for 100% tax relief allowed against the rentals, compared to only 85% for cars with a CO2 greater than 50.


National Insurance (Class 1A)

BEVs fall within the lowest NIC calculated bracket for company car drivers, only 1% from April 2021/22 tax year, rising to only 2% in 2022/23 tax year.

Class 1A National Insurance contributions (NICs) are payable on most benefits provided to employees, including company cars and fuel benefit.

PHEVS

Plug-in Hybrid Electric Vehicles with under 51g CO2 per km


Vehicle Excise Duty (VED)

PHEVs fall into the next lowest VED band with a 1st year cost of only £10 for sub £40,000 vehicles. For PHEVs over £40,000, there is a £325 surcharge, as there is with diesel and petrol vehicles.


Capital Allowances

PHEVS are eligible for 18% Written Down Allowance, compared to only 6% for cars with a CO2 greater than 50g.


Leasing Rental Disallowance (LRD)

Both BEVS and PHEVs are eligible for 100% tax relief allowed against the rentals, compared to only 85% for cars with a CO2 greater than 50.


National Insurance (Class 1A)

PHEVs fall into the next lowest NIC bracket for company car drivers, depending on the EV range capability. Currently, the PHEVs with the greatest range fall within the 40-69 BIK range and are only 7% BIK in 2021/22 tax year, rising to 8% in 2022/23.

Even the poorest range sub 51 CO2 PHEVs are only at 13% in 2021/22 and 14% 2022/23.

Class 1A National Insurance contributions (NICs) are payable on most benefits provided to employees, including company cars and fuel benefit.

Aside from tax, there are significant savings to be made on ‘fuelling’ your electric vehicles compared to their petrol or diesel equivalents. Whether charged at home, the office or on the road, the average electric car costs 4p per mile, compared with up to 17p for a combustion engine.