"The 202021 tax year really is the ideal time to buy an all-electric company car with zero BIK and lower national insurance charges as well as qualifying for an enhanced first year capital allowance."
There are significant advantages to both businesses and company car drivers when they switch to pure electric vehicles, says Simon Bailes Peugeot.
From next month, company car owners will pay no benefit-in-kind tax (BIK) as part of the government’s ongoing drive to encourage the fleet market to take up the zero-emission option.
With an estimated 890,000 company cars on Britain’s roads – clocking up an average 235 miles a week – it would represent a sizeable contribution towards the goal of achieving net zero carbon emissions by 2032.
Under the new rules coming into force on April 6, BIK rates for pure electric cars will reduce from 16 percent to zero. The rate will then rise to just 1 percent in 2021/22 and 2 per cent in 2022/23.
This compares to 37 percent at the current upper end of the emissions scale.
The fact that the government has announced its tax rates for the coming three years will help businesses to plan ahead with confidence.
In addition, five new bands will be introduced for plug-in hybrids and the zero rate also applies to those hybrids with emissions from 1 – 50g/km and a pure electric range of more than 130 miles.
Business owners should also consider adding EVs to their fleet as there are other savings to be made.
When a boss gives an employee a perk, such as a car, it’s treated in the same way as a cash bonus and as a result has National Insurance implications for the employer – but from the 2020/21 there are significant savings to be made.
Simon Bailes said: “This change to BIK will encourage both businesses and company drivers to switch to EV, especially as the government has set out the rates for the next three years.
“The 2020/21 tax year really is the ideal time to buy an all-electric company car with zero BIK and lower national insurance charges as well as qualifying for an enhanced first year capital allowance.”
For further details visit: https://www.simonbailes.co.uk or contact our dealerships: Northallerton (01609 801 468); Stockton (01642 423 075) or Guisborough (01287 221414).