Providing company cars to employees can be a benefit many appreciate. But we all know the downsides. It’s not great for environment and the P11D benefit in kind can land your employees with a bit of a tax bill too.
But what about switching out your company car fleet to electric vehicles? What are the perks of that?
The Eco Perk!
So the obvious one is that warm fuzzy feeling you get from knowing you’re doing your bit to reduce emissions. Electric cars are significantly better for the environment.
Your Employees Probably Want One!
According to research on attitudes to electric cars, more than 43% of the UK population would like an electric car but are put off by the cost. So there’s a good chance that your employees would genuinely appreciate an electric car provided by you, saving them a chunk of cash!
One of the main disadvantages to taking a company car from an employer is the Benefit in Kind tax. The tax liability varies from vehicle to vehicle. But as of now and up to April 2021, fully electric cars are rated zero in the UK for BiK tax. ZERO!
In 2021/2022 tax year, the rate will be 1% and 2% the year after.
Even hybrid vehicles with some electric capability are much lower where emissions are between 1 and 50g/km. For a hybrid with an electric range of over 130 miles the current BiK rate is 2% and will stay at 2% up until the end of the 2022/2023 tax year.
To find out the BiK rate for any car you can use this calculator on the HMRC website.
So What Are You Waiting For?
There’s a growing range of electric cars on the market and they don’t all cost as much as a Tesla! Start your research and find out whether you could lower your emissions and your employees’ tax liabilities by switching to electric.