Date posted: 19th Jul 2019
The Government have announced further good news for those companies considering providing electric cars to their employees.
As we mentioned in our article in November 2018 Hybrid Cars – Changes Afoot the taxable value of such cars was already going to be significantly reduced from April 2020.
However, the Government has now confirmed that all electric vehicles, will attract zero benefit in kind for 2020/21 – this means that the drivers of such company cars will pay no tax at all.
The zero % rate will also apply to drivers of hybrid company cars (but only registered from 6 April 2020) as long as the cars emit less than 50 g/km of CO2 and have a range of 130 miles on a pure electric charge.
The changes meant that our table in the previous article needed updating.
These rates will increase in future years.
Don’t forget that the employing company will benefit too as the reduction in the benefit in kind value, means a reduction in the employer national insurance charge.
Finally, if you are considering offering company cars to employees then you need to take care not to fall foul of the new “salary sacrifice” rules that were introduced a few years ago. It is essential that tax advice is taken before proceeding with the purchase of new company cars.
Please contact us, if you have any queries.