Electric Car Tax Relief Uk

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Electric car tax relief uk. Government has published updated company car tax bands up to 2023 with electric vehicles exempt from tax in 2020. If an electric car has co2 with less than 50g km of emissions can also qualify for 100 first year capital allowances. Pure electric cars and some hybrids will usually qualify for the enhanced capital allowances ecas available for low 75g km or less in 2017 18 but 50g km or less from april 2018 and zero emissions vehicles. However in second and third years it became less attractive as the benefit in kind in these years was still 16 with no additional tax relief.

Turning to the business tax treatment of electric cars there are a number of changes to the usual rules on capital allowances for cars. New and unused co2 emissions are between 50g km and 110g km. The amount of company car tax payable depends on the official value of the car called the p11d the benefit in kind bik rate and the recipient s tax code. With the cost of the vehicle able to be claimed back against your corporation tax bill in year one a 35 000 investment in an electric vehicle would yield a 7 000 saving in tax relief.

In his march 2020 budget chancellor of the exchequer rishi sunak confirmed that motorists buying electric cars would continue to benefit from the plug in car grant to 2022 2023 but it would reduce from 3 500 to 3 000 and cars costing 50 000 or more would be excluded. To find out more about the first year allowance and how to claim it just give our company car tax experts a call on 0121 667 3882 or email us on info. Summary of electric car tax benefits. This electric car tax relief is potentially a big saving for employees making them more likely to choose an electric vehicle as a company car.

Description of car what you can claim. New and unused co2 emissions are 50g km or less or car is electric first year allowances. Electric company car tax. The bik rate will rise to 1 percent in 2021 22 and to 2 percent in 2022 23 being held at 2 for 2024 24 2024 25.

Prior to april 2020 the benefit in kind on pure electric cars was 16 whereas the 100 tax relief in the company meant effectively 19 corporation tax was saved. Use the car tax calculator to calculate the car tax due for any electric vehicle or find out more at our car tax microsite. Are electric cars tax deductible in the uk.