Currently in the UK, new electric cars come with several tax benefits designed to encourage their adoption and promote greener transportation.
With new, electric, retro-inspired cars now available on the market, companies such as Sebring Works Ltd have seen dramatic increases in their order books fed by business owners who wish to not only take advantage of the current significant tax breaks but who also wish to drive unique cars.
Driving a retro-inspired car allows owners to express their individuality and stand out from the crowd. It reflects a unique personal style and taste, different from the ubiquity of modern cars.
Here are some of the key tax benefits for electric cars:
- Benefit-in-Kind (BiK) Tax: For company car users, electric vehicles (EVs) attract significantly lower BiK rates compared to traditional petrol or diesel cars. As of the 2023/24 tax year, the BiK rate for pure electric cars is 2%, making them a very attractive option for company car drivers.
- Vehicle Excise Duty (VED): Pure electric vehicles (EVs) are exempt from Vehicle Excise Duty, commonly known as road tax, for the first year and subsequent years. This can result in substantial savings over the lifetime of the vehicle.
- Plug-in Car Grant (PiCG): Although the Plug-in Car Grant has been reduced over the years, it still provides financial support for purchasing new electric vehicles. As of the latest updates, qualifying vehicles can receive a grant that reduces the purchase price by up to ￡1,500.
- Congestion Charge Exemption: Electric vehicles are exempt from the London Congestion Charge. This exemption makes driving an electric car in central London much more economical, potentially saving drivers up to ￡15 per day.
- Fuel Benefit Charge: For employees with company cars, the Fuel Benefit Charge for electric vehicles is currently zero. This means there is no tax to pay for any electricity used to charge the vehicle.
- Capital Allowances: Businesses can claim 100% first-year capital allowances on the purchase of new electric vehicles. This allows companies to deduct the full cost of the vehicle from their pre-tax profits, providing a significant tax incentive.
- Reduced National Insurance Contributions: Employers can benefit from lower National Insurance Contributions (NICs) due to the lower BiK rates for electric vehicles provided to employees.
- Salary Sacrifice Schemes: Employees can benefit from salary sacrifice schemes for electric vehicles, where they exchange part of their gross salary for a new electric car. This can lead to significant tax savings for both the employer and employee, as the payments are made before tax is applied.
- Workplace Charging Scheme: The Workplace Charging Scheme provides support to businesses for the installation of electric vehicle charge points. This grant covers up to 75% of the cost of installing EV charge points at the workplace, with a cap of ￡350 per socket.
- Zero-Emission Vehicle Incentives: The UK government has various plans and incentives to support the transition to zero-emission vehicles, including investments in charging infrastructure and grants for home charge points.
In summary, these tax benefits make electric cars an attractive option for both private individuals and businesses in the UK, reducing the overall cost of ownership and encouraging the shift towards greener transportation.
Owning a retro-inspired electric car is a passion driven by a blend of nostalgia, aesthetics, unique driving experiences, investment potential, cultural appreciation, community involvement, and personal expression and each owner has their own reasons, often deeply rooted in personal interests and values.
