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Should you make the switch to electric?

9th June 2020

3 minute read

By Lyndsey Hall

Electric and hybrid cars Knowles Warwick Chartered Accountants Sheffield South Yorkshire

 

Electric and hybrid cars have been around for a while, but with the growing focus on environmentally-friendly choices, now might be the perfect time to make the switch. 

Sales of new petrol and diesel cars will be banned from 2035, if the government’s existing plan goes ahead. Which means we’ll all have to embrace electric vehicles eventually, but with the positives of electric and hybrid cars outweighing the negatives, should you make the switch now?

Fewer emissions saves lives

Electric vehicles produce zero tailpipe emissions, reducing air pollution, which is linked to around 40,000 deaths every year in the UK. On average, an electric car could save around 1.3 tonnes of CO2 from tailpipe emissions per year versus a petrol equivalent. That’s enough to fill 50,000 balloons.

Hybrid cars produce far less emissions than single-powered petrol and diesel vehicles, making them a fantastic compromise if you’re still not sold on electric. Both types of environmentally-friendly vehicle are quieter and cheaper-to-run than petrol and diesel, too.  An electric car can cost just 4p per mile to fuel compared to 10-12p per mile for a small petrol car.

There are several options to choose from, including electric, hybrid and plug-in hybrid, with a range of manufacturers from luxury brands like BMW and MINI, to family car brands like Ford, Peugeot and even Smart cars. It’s not just the Toyota Prius anymore, so there’s a good chance you’ll find an electric or hybrid model to suit your particular taste.

Still not convinced? What if you could buy a fleet of electric company cars, completely tax free?

Fewer emissions also saves tax

Last year, the government announced that company car drivers who choose a pure electric vehicle won’t be expected to pay any benefit-in-kind (BIK) tax in 2020/21. So, not only will your fleet of vehicles save lives and protect the environment, they’ll save you money, too.

HM Treasury said that for cars registered from 6 April 2020, most company car tax rates will be reduced by two percentage points. That means for a pure electric vehicle with zero tailpipe emissions, company car drivers will be taxed at 0%, paying no BIK tax at all.

In addition, the zero percentage rate is extended to pure electric vehicles registered prior to 6 April 2020, as well as company cars registered from 6 April 2020 with emissions from 1-50kg/km and a pure electric mile range of 130 miles or more.

But you’ll have to act fast, the saving won’t last forever. Rates for company cars registered both before and after 6 April 2020 will increase to 1% in 2021/22 and then 2% in 2022/23. And cars registered before 6 April 2020 with emissions from 1-50kg/km and a pure electric mile range of 130 miles or more will attract a 2% IK rate in 2020/21 and remain the same for the two subsequent tax years.

From 2023/24, these rates will realign into one BIK tax table.

 

Are you tempted to make the switch to electric vehicles? Have you already traded in your fleet of petrol or diesel company cars for electric instead? We’d love to hear from you, leave your thoughts in the comments below or on our Linkedin page.

 

Related articles: 

How to reduce your carbon footprint

Taxing your car just became less taxing

When is a van not a van?

 

 

 

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