BUSINESS

Why should you Prepare your Company for the Electric Revolution?

Why should you Prepare your Company for the Electric Revolution?

We are on the brink of a paradigm shift in our travel and transport methods. Figures from The Society of Motor and Manufacturers & Traders reveal that over the last three years alone, there has been a twenty-fold increase in the number hybrid and full-electric vehicles being registered. The pace of change is just as rapid as some of the high-end electric cars now hitting the market, and it shows no signs of slowing.

Environmental concerns are now at the forefront of many consumers’ minds.

Businesses that take the initiative and make the change to electric now can align themselves with prospective customers and take advantage of the government tax breaks and initiatives currently on offer.

The green argument for electric vehicles is compelling, but financially speaking, why should your business start gearing up for the electric vehicle revolution today? 

  1. Capitalise on the UK Plug-in Car Grant

The government wants you and your business to buy electric cars, so much so that it’s willing to offer attractive discounts on the purchase price of new electric and hybrid vehicles to commercial and private buyers.

The amount of money you stand to save depends on the emissions of the vehicle you buy, with full-electric cars providing better discounts than hybrids.

  • Category 1 – 35 percent discount up to a maximum of £4,500 on cars with CO2 emissions of less than 50g/km that can travel at least 70 miles with zero emissions.
  • Category 2 – 35 percent discount up to a maximum of £2,500 on cars with CO2 emissions of less than 50g/km that can travel at least 10 miles with zero emissions.
  • Category 3 – 35 percent discount up to a maximum of £2,500 on cars with CO2 emissions of between 50g/km and 75g/km that can travel at least 20 miles with zero emissions.
  • Vans – A contribution of 20 percent of the purchase price is available up to a maximum of £8,000 on vans with CO2 emissions of less than 75g/km that can travel at least 10 miles with zero emissions.

Although the UK Plug-in Car Grant is only available on new vehicles, the increased uptake in new electric vehicles is filtering through and helping bring the price of second-hand electric and hybrid cars down. 

  1. Benefit from attractive company car tax rates

One of the most important factors to consider when choosing suitable company cars is the amount of tax that has to be paid. The tax payable on company cars for private and business use is called Benefit-In-Kind (BIK) tax and this is based predominantly on the CO2 emissions a vehicle produces.

It used to be that electric cars were exempt from taxation due to their zero emissions. However, not to miss a trick, the government has introduced BIK tax on electric cars as they have become more popular, albeit at a substantially reduced rate. Despite the higher purchase price of electric cars compared to equivalent petrol or diesel models, the reduced tax, fuel and running costs could make good financial sense for your business.

You can work out the tax you’d have to pay on different company cars using HMRC’s company car tax calculator. 

  1. Receive a contribution from the Workplace Charging Scheme

Businesses that show they are eligible can receive a contribution of £300 on any electric charging point they install, up to a maximum of 20 points. Businesses, charities and local authorities can all apply for the Workplace Charging Scheme. To be eligible for the scheme, businesses must have a dedicated off-street parking area for staff vehicles which is suitable for the installation of charging points. Businesses also do not need to own or lease any electric vehicles when they apply but they must show that they will need electric vehicles in the future.

Applying for the grant is a simple online process. If successful, you’ll receive a voucher code to use with any installer approved by the Office for Low Emission Vehicles (OLEV). 

Making the switch to electric

Given the financial incentives and the many benefits associated with electric vehicles, more and more businesses are making the switch to electric. Is now the right time for you to join the electric revolution?

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