Electric cars are becoming increasingly more popular, as of 2018 there are now over 135,000 electric cars on our roads. There are now a much larger range of vehicles to choose from and public charging is becoming much more accessible.
These cars have electric motors which are powered by the electricity created from batteries or fuel cells. When fully charged, most electrical vehicles have the range of 80 to 100 miles, whilst some of the more luxury models can go up to 250 miles. Depending on the type of battery and the charger it can take anywhere from 30 minutes to a whole day to charge fully.
An electric car can save you a lot of money in the long run in terms of fuel, running on electricity means you’ll never have to buy fuel again. This makes electrical cars much cheaper to run. These cars are 100% eco-friendly as they emit no toxic gases or smoke. Another benefit of these fantastic cars is that they do not need to be serviced as often as gasoline powered vehicles.
The British Government are trying to incentivise people to swap to an electric vehicle by providing grants on these cars to the dealerships who sell the electric car, so they can lower the price for the buyers. The amount of grant is dependent on how eco-friendly that vehicle is – category 1 electric cars receive the highest grant.
There are also tax benefits that you will receive as a business or an individual by using and owning an electric vehicle.
As an individual, you will receive no fuel duty tax because an electric vehicle doesn’t run on combustible fuels, plus vehicles valued less than £40,000 that emit zero emissions are exempt from Vehicle Excise Duty. Additionally, electricity used to recharge an electric car at your home will only incur a 5% level of VAT, as opposed to the 20% road fuels incur.
If you use your electric vehicle for business, you will receive a lower tax rate on a company car that is electric as opposed to a gasoline powered engine. If you use a salary sacrifice scheme to purchase your electric vehicle you are eligible for tax benefits in the form of a reduced income tax liability and a reduced national insurance liability. In some cases, an Enhanced Capital Allowance is available against energy efficient vehicles. This allows a business to write off the whole cost of an asset against taxable profits in the year of purchase.
If you have been thinking about getting an electric vehicle now could be the perfect time, the British Government is really pushing the electric vehicles this year and this looks set to continue. If you have any questions about the benefits and the tax relief that is connected to owning an electric vehicle please feel free to get in touch.