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Go Electric
Go Electric

 

Electric is the future!

 

One of the global goals for sustainable development, outlined by the United Nations, is affordable and clean energy.

This is tied to the belief that everyone should have access to modern, sustainable and reliable energy that doesn’t cost the earth.

With this in mind, here is an overview of the various tax incentives in place for making more environmentally friendly, carbon reducing decisions when it comes to your business and how it operates.

 

 

Enhanced Capital Allowances

 

The Enhanced Capital Allowance (a type of first year allowance) is available to businesses to encourage the use of energy and water efficient equipment.

You can claim an ECA for the following equipment:

  • some cars with low CO2 emissions
  • energy saving equipment that’s on the energy technology product list, for example certain motors
  • water saving equipment that’s on the water efficient technologies product list, for example meters, efficient toilets and taps
  • plant and machinery for gas refuelling stations, for example storage tanks, pumps
  • gas, biogas and hydrogen refuelling equipment
  • new zero-emission goods vehicles

 

To read more on other types of Capital Allowances, read our blog post on capital allowances for asset investment.

 

 

Tax incentives for Electric Cars

 

The Government recognises the value of the company car market in supporting the transition to zero emission technology.

In light of this, it has been announced that company car drivers that choose an electric vehicle will not be liable for paying Benefit-in-Kind (BIK) tax in 2020/21.

For cars first registered from 6th April 2020, most company car tax rates will be reduced by two percentage points, bringing the percentage down to 0% for all zero emission company cars.

While these rates are now set in stone for the 2021/22 tax year, the new chancellor under the next prime minister will have the opportunity to alter future years’ rates if they wish to do so.

View the table below for the full list of figures, relating to company car Benefit-in-Kind tax rates, for 2020-23.

 

Company Car Tax BIK Rates April 2020 to March 2023

Table shows BIK rates for models registered from 6th April 2020, based on official WLTP CO2 figures.

Vehicle
CO2
(g/km)

Electric
range
(miles)

FY 2020-21
%BIK Rate

FY 2021-22
%BIK Rate

FY 2022-23
%BIK Rate

Petrol,
Electric,
RDE2
Diesel**

Non-
RDE2
Diesel**

Petrol,
Electric,
RDE2
Diesel**

Non-
RDE2
Diesel**

Petrol,
Electric,
RDE2
Diesel**

Non-
RDE2
Diesel**

0

 

0

 

1

 

2

 

1-50

130+

0

 

1

 

2

 

1-50

70-129

3

 

4

 

5

 

1-50

40-69

6

 

7

 

8

 

1-50

30-39

10

 

11

 

12

 

1-50

<30

12

 

13

 

14

 

51-54

 

13

 

14

 

15

 

55-59

 

14

 

15

 

16

 

60-64

 

15

 

16

 

17

 

65-69

 

16

 

17

 

18

 

70-74

 

17

 

18

 

19

 

75-79

 

18

22

19

23

20

24

80-84

 

19

23

20

24

21

25

85-89

 

20

24

21

25

22

26

90-94

 

21

25

22

26

23

27

95-99

 

22

26

23

27

24

28

100-104

 

23

27

24

28

25

29

105-109

 

24

28

25

29

26

30

110-114

 

25

29

26

30

27

31

115-119

 

26

30

27

31

28

32

120-124

 

27

31

28

32

29

33

125-129

 

28

32

29

33

30

34

130-134

 

29

33

30

34

31

35

135-139

 

30

34

31

35

32

36

140-144

 

31

35

32

36

33

37

145-149

 

32

36

33

37

34

37

150-154

 

33

37

34

37

35

37

155-159

 

34

37

35

37

36

37

160-164

 

35

37

36

37

37

37

165-169

 

36

37

37

37

37

37

170+

 

37

37

37

37

37

37

** Rate applies to diesel vehicles not meeting the RDE2 standard. For diesel-hybrids, the Non-RDE2 4% diesel surcharge does not apply. All BIK rates will apply to cars registered from April 2020. Source: HMRC 2020.

 

 

Discount on Electric Cars

 

Certain low-emission vehicles are eligible for a plug-in grant.

This is a grant that the government gives to car dealerships/manufacturers, which gives you a discount on the purchase price of a brand new eligible plug-in vehicle.

You do not need to do anything if you want to buy one of these vehicles- the dealer will include the value of the grant in the vehicle’s price.

To be eligible for the grant, cars must cost less than £50,000. This is the recommended retail price (RRP), and includes VAT and delivery fees.

The grant will pay for 35% of the purchase price for approved cars, up to a maximum of £3,000.

Other vehicles (vans, large vans/trucks, taxis, mopeds and motorcycles) are also eligible for the grant, though the figures do differ.

Click here for the full list of specific low-emission vehicles eligible for the plug-in grant.

You can also get up to £350 (including VAT) off the cost of installing a charger at home through the Electric Vehicle Homecharge Scheme.

 

 

Contact Our Team Today

 

At Gow & Partners, we are eager and excited to see business transition to electric energy. With that being said, we understand that this is a big leap to make for any business, which is why we are always here to support and advise you.

Simply call 01254 589799, or email info@gowandpartners.co.uk.