If you drive a company car that is a pure electric car, then this is a must read article for you. For all company cars registered after 6th April this year, there are changes to be aware of! There were previously published Benefit-In-Kind (BIK) tax rates for 2020 / 2021 that have now been scrapped and replaced with new BIK tax rates for company car drivers.
Company Cars Registered On or After 6th April 2020
If you have a pure electric car with zero emissions that was registered on or after 6th April 2020 you will pay no BIK tax at all. You vehicle will be taxed at 0%. This new rate of 0% will also apply to new company cars that have emissions from 1g/km to 50g/km and 130 mile pure electric mileage range.
Company Cars Registered Before 6th April 2020
Drivers of company cars that are pure electric and have been registered before 6th April 2020 will be afforded the 0% tax rate. However those company car drivers meeting the criteria of 1g/km to 50g/km and 130 mile pure electric mileage range will attract a 2% BIK tax rate. This tax rate will stay the same for the next two tax years.
Why BIK Rates Were Updated
These updated BIK rates further prove the intent of boosting electric vehicle usage by the Government. The Government has recently called for all public charge points for all electric vehicles to accept debit and credit card payments. They have also called for electric car chargers to be installed in all new-build homes.
The Treasury report from the Government confirmed that the ultra-low emission vehicle BIK taxes will stay in place for at least the next 3 years. This had helped give clarity to employers that may be considering making the transition to zero emission vehicles for their company fleet for the future.
If you are considering going greener with your company cars, it is worth noting that pure electric cars and some hybrid vehicles will usually qualify for 100% first year capital allowance in the year they have been purchased.
Contact our team to discuss your company car leasing options.