Did you know that switching from petrol or diesel to electric commercial vehicles could help to save your business money?
Businesses are under increasing pressure to find ways to work more sustainably and reduce their carbon emissions to help protect our planet.
If your business runs commercial vehicles, making the switch to electric models can help to dramatically cut your carbon emissions. But did you know that it could save you money too?
Electric vehicles emit zero emissions and are virtually silent, making them a pleasure to drive and reducing noise pollution too.
To encourage businesses to reduce their carbon emissions the government have put in place several tax incentives for running electric commercial vehicles.
Tax benefits of electric commercial vehicles
Enhanced capital allowance benefits
When your business buys a vehicle, it can claim capital allowances by deducting a percentage of the vehicle’s purchase price from its profits before paying tax. The percentage that can be claimed depends on the vehicle’s CO2 emissions.
Currently, the entire cost of an electric vehicle can be claimed against taxable profits in the first year.
Businesses operating electric vehicles are exempt from paying fuel duty and vehicle excise duty.
Zero company car benefit-in-kind tax from April 2020
The government have also announced that businesses will pay zero benefit-in-kind tax on electric vehicles as of April 2020. This will increase to 1% in April 2021 and 2% in April 2022.
Other financial benefits include:
- Reduced running and maintenance costs
As well making savings on your tax bill, electric vehicles are generally cheaper to run and maintain than petrol and diesel vehicles.
- Grant schemes available
You may also be able to receive up to 35% off the purchase price of an electric vehicle using the government’s plug-in car grant.
For more help or advice with corporate tax, give our team of experts here at Michael Bell a call on 01484 690 730.