Tax savings for electric company car?
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Hello,
Our family car has just died. It was however used mostly by my wife who used it for valid business trips to clients several times a week. I am still trying to make head or tail of the tax implications of an electric replacement company car.
She is a joint director of our non-vat lmt company and a paye employee of it. I am also a director. We are both basic rate tax payers.
Savings of an electric car?
VED/Road tax exempt
BIK 2%of p11D (2020/21) list price (rather than 20%) = approx £100 per year
Capital Allownce is 100% 1st year allowance if bought new for the company. So the cost of the car is treated as a taxable expense? Is this right, even if the car is also used privately?
Or if it’s second hand, 18% single asset pool. So i assume that is that you can claim 18% of the cost in the first year, and 18% of the pool after that.
Battery hire can also be a company expense, as well as a portion of the electricity used to charge the batteries..
I must be reading this wrong? If the company buys a new £20k electric car, it’s total value is treated as taxable expense, and the cost for private use to the employee will be BIK and electricity/fuel used?
really? :j
Our family car has just died. It was however used mostly by my wife who used it for valid business trips to clients several times a week. I am still trying to make head or tail of the tax implications of an electric replacement company car.
She is a joint director of our non-vat lmt company and a paye employee of it. I am also a director. We are both basic rate tax payers.
Savings of an electric car?
VED/Road tax exempt
BIK 2%of p11D (2020/21) list price (rather than 20%) = approx £100 per year
Capital Allownce is 100% 1st year allowance if bought new for the company. So the cost of the car is treated as a taxable expense? Is this right, even if the car is also used privately?
Or if it’s second hand, 18% single asset pool. So i assume that is that you can claim 18% of the cost in the first year, and 18% of the pool after that.
Battery hire can also be a company expense, as well as a portion of the electricity used to charge the batteries..
I must be reading this wrong? If the company buys a new £20k electric car, it’s total value is treated as taxable expense, and the cost for private use to the employee will be BIK and electricity/fuel used?
really? :j
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Comments
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The low BIK rate does not come in for another 12 months - currently they are pretty poor on BIK for what they are. I've just replaced my car, and given the tax implications from next year, perhaps my next one will be full electric.0
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yep.. 6th april 2020 for the bik
So one year at 13% i.e. £750 for the first year and then £100 for the subsequent years
still seems ok it me
(the 100% first year allowance runs out 31st march 2021)0 -
Read stories of companies buying it for the tax 'advantages', but their drivers just filling and refilling with petrol, and not using the electric option! Getting about 40 mpg if lucky, rather thran two or three times as much!I used to work for Tesco - now retired - speciality Clubcard0
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the 2% is for electric only not hybrid plug-in.
i’m fine with 70miles on a cold day on the motorway0
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