The Benefits of Electric Vehicles for Business Owners
There are multiple benefits that come with driving an electric vehicle, which makes it an increasingly popular choice for people across the UK. These advantages are wide-ranging:
Better for the environment. Depending on where the car’s parts were manufactured, it will emit between 28% and 81% less CO2 than a traditional car that runs on petrol.
Increased safety. Recent tests have shown that due to electric cars having a lower centre of gravity, they’re less likely to roll over. They can also come with a lower risk of major fires and explosions occurring in the event of a collision due to a stronger framework.
Improved health. Electric cars have significantly reduced exhaust emissions, resulting in better air quality for everyone.
Lower noise pollution. EVs are quieter than petrol and diesel cars, resulting in less noise pollution during their operation.
Increasing range. Most current electric vehicles can travel around 300 miles before requiring a charge, with future models likely to improve on this even further.
Whilst all of the above are fantastic, there’s also another benefit to be had from driving an electric vehicle: they’re highly economical. This is because EVs are cheaper to both run and maintain, plus they come with many opportunities for tax relief if you’re a business owner.
They’re cheaper to run
As a rough idea, the average electric car can travel 100 miles at a cost of around £4 in electricity usage. How does this compare to your current petrol or diesel vehicle? Chances are you’re currently paying more than twice that amount.
They’re cheaper to maintain too
Fewer moving components means less maintenance and servicing, as parts such as starter motors, complex exhaust systems, radiators and injection systems are absent. It’s true that the battery will eventually wear out, but with most manufacturer warranties lasting around eight years it will be a while before you have to replace it.
Say hello to lower tax payments
Aside from there currently being zero tax on Benefit in Kind for electric cars owned by businesses, there’s also the bonus of 100% of capital allowances in the first year. This means that if you purchase an electric car for business purposes, you can deduct the full cost from your pre-tax profits.
Also, road tax is based on CO2 emissions, with owners of fully electric cars not having to pay any at all. If you have a hybrid vehicle, you’ll have to pay some road tax but it will be significantly lower than if you were driving a petrol/diesel vehicle.
The only exception is if the vehicle was purchased for £40,000 or more, as all cars in this price bracket come with an additional road tax bill. However, rather than the normal £475 it will only be £325 a year for the first five years. Crucially, some of the best electric cars on the market cost a fair chunk less than £40k, so this needn’t be a concern.
Say goodbye to the congestion charge
Do you travel in areas where there’s a congestion charge, or where the local authority is likely to introduce one soon? With an electric car you don’t have to pay it, simple as that.
A good example is if you drive around the Congestion Charge Zone within London a lot, as switching to an EV will save you £15 every day!
Lower tax on fuel
Business owners still have to pay 20% tax on the electricity that’s used to charge their vehicles. The upside is that there’s no fuel duty tax, which is currently 58p a litre and really adds up if you drive often. Likewise, the saving made by EV drivers really adds up and can make a big difference to your monthly cash flow.
Tailored tax advice
If you’re looking for a tax consultant that treats you as an individual, call our Yorkshire office on 01482 235575 or our London office on 0207 885 0605. Alternatively, you can fill in our contact form and one of our finance specialists will get back to you right away.
Tagged as: Tax & Expenses
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