Date
29 Jun 2022Category
Employer Solutions, TaxThe UK’s net-zero carbon strategy is rightly focusing minds in a way we’ve never witnessed before and this is showing through increased demand for electric battery company cars.
Pure-electric cars currently share 11.6% of the UK’s new car market and are poised to make up one in six new cars on the roads this year. This will undoubtedly accelerate as the charging infrastructure grows.
At Azets we are receiving numerous requests from business owner clients, keen for advice on how best to use the current tax incentives to help them retain key staff and consider the provision of an electric vehicle as part of the employee reward package, as a viable alternative to a simple pay-rise. We believe this trend will continue in the current economic environment. In addition, many businesses are also examining the environmental and regulatory considerations of providing electric vehicles.
As the eco revolution accelerates, what are the benefits for switching to electric company cars?
Vauxhall Corsa SE |
BMW 330d M Sport |
Nissan Leaf Tekna |
Tesla Model 3 |
|
Fuel Type |
Petrol |
Diesel |
Electric |
Electric |
List Price |
£15,356 |
£44,035 |
£34,440 |
£48,490 |
CO2 Emissions (g/km) |
93 |
137 |
Nil |
Nil |
2022/23 BIK (%) |
23% |
32% |
2% |
2% |
Cash Equivalent |
£3,530 |
£14,091 |
£689 |
£970 |
Employee Marginal Tax Rate |
20% |
40% |
20% |
40% |
Income Tax on BIK |
£706 |
£5,636 |
£138 |
£388 |
Class 1A NI costs |
£262 |
£2,121 |
£51 |
£146 |
Total Tax Cost |
£968 |
£7,757 |
£189 |
£534 |
Tax Saving (employee) |
- |
- |
£568 |
£5,249 |
Class 1A NI saving (employer) |
- |
- |
£211 |
£1,975 |
If you have any queries regarding company cars and the options available, or would like to discuss any further employment tax matters, please get in touch with your usual Azets contact or a member of our specialist Tax team.
Azets partners with Total Motion
To provide our clients with advice on vehicle leasing and further company car matters, Azets has partnered with Total Motion, a major UK fleet management and leasing provider.
Simon Hill, Total Motion Director, commented:
“Our partnership with Azets is helping decarbonise road traffic as more companies look to the environmental, tax, staff retention and reputational benefits of pure-play electric vehicles for their employees. From 2030, which is not that far off the horizon, the sale of new petrol and diesel cars will be banned. That cut-off date is focusing many minds.”