New Benefit in Kind rules are about to accelerate EVs at work, here’s what you need to know
Anyone who thinks electric vehicles (EVs) are a short-lived trend is in for a surprise.
There are now over 900,000 electric and hybrid cars on UK roads almost 20,000 locations to charge your vehicle. This is a huge jump from only a few years ago and it is only set to accelerate. The industry expects to hit one million EVs later this year.
The increase has come as costs decline and new policies to cut carbon emissions have been introduced. The government’s recent announcement that the ban on new petrol and diesel cars will be brought forward to 2035 is a sign that a fully electric future is on the horizon.
Zero Benefit-in-Kind tax on EVs
Company cars are a major driver of new vehicles in the UK; figures show that 57% of all new car registrations were made by companies. And new tax changes from 6th April 2020 stand to dramatically change the game in favour of EVs. All company cars are currently subject to a tax, a benefit-in-kind (BIK), for whoever uses them. In a push to encourage low-carbon forms of transport, the government has decided that from April all pure electric cars will pay zero tax for the first year, rising to 1% and then 2% for the following years. In contrast, dirty diesel and petrol vehicles, which emit high levels of carbon dioxide, will have to pay a rate of up to 37%.
Depending on the car and level of tax an employee already pays, this could work out as the difference between paying £0 per month and £1,000 per month in tax for exclusive use of the vehicle. It’s fair to say that many people who previously would not have thought about investing in an electric car will now be seeing the strong incentives towards doing so.
Good Energy is supporting the EV revolution as the next battleground in the fight against climate change.
Sustainable business benefits
Tax and grants are not the only benefits from investing in clean cars at work. Sustainability credentials are increasingly important, not only to winning new business contracts, but retaining talent within a company. At Good Energy, we offer travel allowances for our people who get to work in a sustainable way, either through an EV or by train, bicycle or on foot. Car leasing schemes are also an attractive option to support your people go electric. We use Tusker, which takes advantage of the salary sacrifice scheme to offer staff new electric vehicles without having to pay an upfront deposit, insurance, repair or MOT costs.
There are clearly financial and regulatory pulls towards making electric vehicle charging a normal part of the workplace. And chargers are more than just a plug on the wall. They offer businesses an array of benefits: from software to monitor manage and limit the energy usage of your chargers, simple configuration of pricing and payment options and dashboards to show your energy consumption and costs. There is also the option of making chargers available for public use, an added community benefit and potential revenue source for businesses, or limiting them to access by employees or guests.
Good Energy is supporting the EV revolution as the next battleground in the fight against climate change. Last year, we launched One Point, an all-in-one service designed to simplify the process of electric vehicle charging for businesses. The service supports companies which want to offer EV charging to its staff, customers, and visitors, all powered by 100% renewable electricity.
As we start to roll-out the service across the country, we are seeing more businesses look at how electric vehicles can cut costs and support sustainability plans. And as demand for clean cars increases, we expect much more of the same in the future.
