The cost of living crisis is increasing inflation dramatically right now and it's never far away from the front pages. However, at the heart of all this uncertainty is energy pricing. Maybe offering electric vehicles to your employees is worth it now?
The adoption of EVs is growing rapidly and now may be the time to look at it seriously!
I often get asked how an employer can help their team with ways to reduce costs or increase net pay in the most tax-efficient way. One area that is generating great interest right now is electric vehicles (EVs) offered as company cars.
There are benefits to offering an EV as a company car:
lower taxable benefits in kind on EVs when compared with petrol or diesel cars
reduced employee and employer National Insurance contributions when provided through salary sacrifice arrangements, resulting in increased employee net pay
no taxable benefits in kind on installing chargers at employees' homes, or when cars are charged at the employer's premises
a tax deduction of up to 100 per cent for the employer on the cost of buying the EV and charging equipment
free charging at many retail and other public sites/car parks
lower business mileage costs and reduced fleet servicing and maintenance costs for the employer
lower commuting costs for staff
clear environmental benefits
Employers can extend the offer of Electric Vehicles beyond the 'job need' to all employees via a salary sacrifice scheme. The monthly cost of leasing and running the cars are covered by the employee through salary reduction in return for the car being provided for daily use.
This is very tax efficient for both the employer and the employee and some of the additional benefits include:
a fully maintained and insured new car with no credit check or finance and/or deposit required
no residual value risk, as would be present if the car were owned privately
a cash lump sum for selling their current car
reduced commuting and other running costs
There are many factors to consider when deciding on introducing EVs to the company car fleet, but the adoption of EVs is growing rapidly and with other cost pressures on both employers and employees, now may be the time to look at it seriously.
I know an excellent electric vehicle leasing guy if you'd like an introduction.
Until next time ...
ROGER EDDOWES Business Godparent
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about electric vehicles for your employees, it may be a great idea to call me on 01908 774320 and let's see how I can help you.
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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