Electric car in April 2020

katy123

I am thinking of taking advantage of the tax changes in April next year (0% BIK) for company cars. does anyone know if this only applies to new cars, or can the company buy a used electric car? Also, how can the electricity cost be reimbursed to the director if the car is charged at home? And at what rate? Thanks.

00ec25

read this, then ask further if you do not understand
https://www.buyacar.co.uk/cars/277/company-car-tax-rates

Pennywise

Given we don't even know what government will be in place this time next week, I'd suggest you wait to ensure that the proposed changes do in fact come into force.

I'd also urge caution. There's no guarantee that the tax advantages will last more than a year or two if they do come in. The govt/Treasury need taxes from car drivers, and if fewer people are using petrol/diesel cars, there'll be quite a loss in tax revenue, so sooner or later, electric cars will be taxed and probably end up taxed at the same kind of levels as petrol/diesel cars are today once the majority of cars are electric.

00ec25

as pennywise wisely cautions, rules change
we have clients who bought Teslas when they first came out and had favourable treatment at that time.
Then the rules changed, and they were left owning cars with a very high list price and a benefit in kind charge they had not banked on when buying.

katy123

thank you for the comments. If I assumed a worst case scenario whereby the BIK rate is put back up to 16% or higher in a few years time, can I not sell the company electric car to me personally to bypass the tax and just claim 45p per mile?

00ec25

the company would incur a balancing charge on the sale to the employee, but as far as the employee is concerned, yes no more BIK, and instead an ability to claim the electric car rate per mile (currently 4 pence)