Electric Vehicles for business

There are numerous benefits to having an electric vehicle fleet for your business. Whether you have a few cars or a hundred we are more than capable of electrifying your fleet! But why, as a business owner, should you make the switch to electric?

An Environmentally Aware Business is a Profitable Business

An Environmentally Aware Business is a Profitable Business

In recent years, there has been a huge push for environmental sustainability from both governmental bodies, but more importantly, the consumer. 84% of global consumers seek a positive environmental and social commitment from the businesses they deal with.

That being said, some businesses can benefit more than others from being environmentally aware. If you're target market is millennial's, then you're in luck. In a 2015 survey, 72% of millennial's said they would pay more for products and services that come from companies who are committed to environmental sustainability. For baby boomers, this was still significant at 51%.

Ultimately, customers like businesses that are environmentally aware. By switching to electric this is an excellent selling point which you can use on your marketing campaigns, your products and your website. Helping you stay ahead of your competition.

Increased Staff Satisfaction

With company cars being an extremely desirable job perk. Switching to electric vehicles can be an even better way to incentivise your staff. Simply put, we think electric vehicles are more fun to drive, safer and cooler. We're sure that your staff will love them!

Lower Running Costs

Electric vehicles can be much cheaper to run than standard petrol vehicles! With less moving parts they often require far less maintenance. Multiply this saving by a whole fleet of vehicles and it can be considerable. Electric vehicles are also far cheaper to fill up than petrol vehicles. You can see how much you can save in our electric vehicle charging guide. Switching to electric could save you money and improve your cashflow, giving you more funds for elsewhere in your business.

The Cool Business

The general public still perceive electric vehicles to be very much in their infancy (believe it or not electric vehicles were invented before the internal combustion engine came to life). This perception gives them a futuristic grandeur that you simply don't get with petrol vehicles. This makes you look great to clients and other business relations. Want your business to look like you have a grasp of the latest technology? Electrify your fleet to stand out to your clients.

Grants for Charging Infrastructure

Currently there are government grants towards installing charge points making it even more cost effective to switch to electric vehicles for business now! You can claim £350 per charge point for up to 40 charge points if you are a business. Whilst not only being able to charge your fleet, your staff will be able to charge their own electric vehicles from your charge points. Don't worry, tariffs can easily be set with most commercial charge points meaning you can charge for usage if you require. This is a brilliant incentive for staff with electric vehicles and a great way to future proof your business. If you own your business property, it is likely that this charging infrastructure will increase the value of your property.

Emissions Zones

Low emission zone charges have been implemented in London already and are being looked into by numerous other local authorities. The London emission zone (LEZ) charges £12.50 per day (2019). For businesses that have fleets regularly entering this zone, the cost of these emissions zones is a large expense. One that you’ll either have to absorb, or pass onto your customers via an increased price in your products or services. These emissions zones appear to be becoming more common all over the UK. Will it be your city next?

Low Emissions

Tax Benefits

There are many tax benefits of electric cars and vans that we think you should know about! The government are making tax benefits increasingly more prominent for electric vehicle drivers - the incentives just keep getting better! For businesses, these reduce your business costs and the tax burden on your staff, giving them more money and financial stability. Ultimately, this means a happier workforce.

Benefit-in-kind Tax

Benefit in kind are benefits that either an employee or director will receive from their employer than are not included in their standard wages. Whilst some benefit in kind’s aren’t taxable, unfortunately, company cars are.
Benefit in kind tax is calculated using three figures. Your wage, the CO2 emissions and the P11D value of the vehicle. The higher these values, the more you will pay!

In 2019, the benefit in kind rate was 16% for all electric vehicles. In 2020, this figure dropped substantially to a minimum of 0%.

Your annual company car tax cost can be calculated using the following formula:

BIK rate (%) x P11D (£) x your general tax rate (%) = Annual Company Car Tax (£)

An electric vehicle can be a great company vehicle for someone. They're cheap to refill, perfect for the commute and can save your employees a lot of cash.

BIK Rates
CO2 Emissions (g/km)
0 g/km 16% 0%
1-50 (electric range >130 miles) 16% 2%
1-50 (electric range 70-129 miles) 16% 5%
1-50 (electric range 40-69 miles) 16% 8%
1-50 (electric range 30-39 miles) 16% 12%
1-50 (electric range <30 miles) 16% 14%

How much company car tax will I save by switching to electric?

Here are two different scenarios to show you how advantageous it can be from a company car tax perspective to switch to electric in 2020.

Scenario 1

A Nissan Leaf compared with a Mini Cooper Clubman. This is for your average employee that is on a 20% tax rate and thus earning under £46,000.

Nissan Leaf
Mini Cooper Clubman
P11D Value £27,995 £20,730
Emissions g/km 0 118
BIK Rate 0% 22%
Annual Cost £0 £912.12

In this scenario, having an electric vehicle would save the employee £912.12 in 2020 in tax.

Scenario 2

A Jaguar IPace compared with a Range Rover Sport. This is for a company director or senior employee on a 40% tax rate earning between £46,000 and £150,000.

Jaguar IPace HSE
Range Rover Sport
P11D Value £74,390 £65,685
Emissions g/km 0 198
BIK Rate 0% 37%
Annual Cost £0 £9,721.38

In this scenario, having an electric vehicle would save the employee £9721.38 in 2020 in tax.

Class 1A National Insurance Tax

Another one of the tax benefits of electric cars is national insurance savings. Class 1A national insurance tax is paid as a percentage of the employees BIK tax. This is a tax paid by the employer only and is a static rate of 13.8% paid based an employees BIK tax.

As an employer, how much Class 1A national insurance tax will I save by switching my fleet to electric vehicles?

Using the same scenarios as above the National insurance tax to pay would be:

Scenario 1

Nissan Leaf
Mini Cooper Clubman
BIK Tax £111.98 £912.11
Class 1A NI Tax £15.45 £125.87

In this scenario, an electric vehicle would save an employer £110.42.

Scenario 2

Jaguar Ipace HSE
Range Rover Sport
BIK Tax £595.12 £9,721.38
Class 1A NI Tax £82.13 £1,341.55

In this scenario, an electric vehicle would save an employer £1259.42.

These savings spread across a whole fleet of vehicles can save employers a large amount of money. As well as tax savings, employers can save a large amount on fuel. View our electric vehicle charging guide to find out how much!

Road Tax

Whilst all our contract hire vehicles have road tax already included in your monthly payments. Currently, all fully electric vehicles are exempt from road tax. This is another saving that you will have on your leased vehicle.

The tax benefits of electric cars are numerous. However, there are many other benefits to electric vehicles as well! 

Please note: Electric Vehicle Contracts are not an IFA. Information found on this site is no substitute for your own qualified tax advice.