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The uptake of company cars had taken somewhat of a hit over the past few years as many organisations opted to offer cash alternatives to their employees, reducing the number of traditional corporate fleets. However employees who currently opt out of a company car are looking at re-joining schemes to benefit from new rates for electric vehicles (EVs). These business employees are saying they are ‘likely’ or ‘very likely’ to move back to company cars – and these cars will be electric or at least ULEV.
'The return of the company car' rather than employees taking car allowances is being driven by a number of issues; one of the main factors is the change to Benefit in Kind (BIK) company car tax: there is zero company car tax on battery electric cars since April 2020, meaning that employees could save thousands of pounds each year by switching to a pure EV.
There are a number of other factors, including EVs having lower whole-life costs and motorists preferring the driving experience of EVs.
As if all that wasn’t enough, the government has recently announced that it is planning to bring forward the ban on sales of new petrol and diesel vehicles – including plug-in hybrids – from 2040 to 2035 – or possibly even as soon as 2032.
With a wide range of new EVs currently coming to market, supported by financial incentives, NOW is the time for business users to make the switch.
There’s never been a better time to make the switch to EV company cars, with huge savings available for your business. You may think there’s going to be a high cost associated with giving your business’s reputation such a great boost. Not so. EVs are more affordable than ever, while there are often government grants and other incentives to help bring down the cost.
EVs are easier to run and maintain. With fewer moving parts, servicing, maintenance and repairs may be cheaper, less frequent and easier to manage meaning less downtime for your drivers. Many EVs also have regenerative braking which reduces wear on brake pads, lessening the frequency with which these need to be changed.
Another general benefit to EVS, in addition to the funding advantages, fuel cost reductions, environmental and CSR pro's is that the the companies National Insurance contribution is linked directly to the vehicles BIK rate. i.e. Vehicle value and co2. So, for example the company would pay 13.8% of 0 for a fully electric vehicle. Compare this to an Audi A4 Diesel S SLine and the annual NI for the business would be c.£1400pa.
If your company is considering making the switch to Electric, you may want to think about installing some charge points in the car park. Currently, the government’s Workplace Charging Scheme offers businesses a contribution of £500 towards up to 20 charging points. That could help your bottom line circa £10,000. Having these points for visitors to use can be a great way to show off your green credentials, while also leading to potential clients staying longer on your premises.
4th of September 2020
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