Electric car leasing has a huge number of benefits for company owners and directors. Aside from the fact that you’re doing your bit to cut carbon emissions, there are also some incredibly sizeable tax benefits to be had as well.
So here’s are guide and it’s going to cover:
- The most popular electric vehicles available for lease in the UK in 2021
- Approximate lease costs
- Income tax on the Benefit in Kind value of the lease
Most Popular Electric Vehicles (EVs) in the UK
Lowest Lease Price (Manual Check, Jan 2021) Including VAT
Miles From a Full Charge
Up to 282
Hyundai Ioniq Electric
Up to 193
Tesla Model 3
Up to 360
Up to 144
Up to 248
Up to 189
Prices will vary depending on lease length, specific model, mileage allowance and other circumstances. Miles from a charge again can vary based on specific model. Regard the above as an estimate and research carefully before committing to any electric vehicle lease.
Benefit-in-Kind Tax on Company Electric Cars
So, tax is payable on any company paid for car that you use at all for personal use. You can find out more about the details of that here.
But the main reason that electric vehicle leasing is a financially favourable option (as well as the green option) is because all cars are not equal when it comes to tax.
In a bid to incentivise green car usage over the years, the Government has given some serious tax breaks to company electric car users (and even hybrid models to a lesser extent).
The amount of tax you pay will is seriously reduced by driving an electric powered car of any sort. Essentially, for any vehicle that is between 1 and 50g/km in emissions terms (hybrid), the tax rate calculated based on how many miles the car can run on its batter before it needs recharging. This is also known as its “zero emission mileage” figure.
And when you get into the all electric vehicles (0g/km) the real savings happen.
Now, if you’re getting an electric car as a company car for the first time in 2021, you’ve missed the real party! For tax year 2020-2021, all electric cars had a zero benefit-in-kind tax rate.
That’s no longer going to be the case, but the rates are still much more favourable than they are for Diesels, petrols and hybrid vehicles.
But here’s how the rates look for the coming year with rates for hybrids for comparison:
Vehicle Electric Range and Emissions
1-50 g/km emissions with electric range of more than 130 miles
1-50 g/km emissions with electric range 70-129 miles
1-50 g/km emissions with electric range 40-69 miles
1-50 g/km emissions with electric range 30-39 miles
1-50 g/km emissions with electric range of under 30 miles
All rates based on cars registered after April 2020
To give this some context, the BIK rates for 2021-2022 on a vehicle with emissions of over 165g/km (something like a Kia Sportage) are 37% for a basic rate tax payer.
So it’s a notable difference.
Charging Points and Other Considerations with EV Leasing
Of course, you’ll need access to charging points, ideally at home if that’s where the vehicle is kept.
This is a consideration in terms of cost and where you’d put such a point (ideally on a drive or similar).
If you are planning journeys outside of the electric range of your vehicle you’ll also need to plan stops based on access to charge points.
This is getting much easier as electric vehicle infrastructure is improving quickly in the UK.
Finding a Business Electric Vehicle Lease
Shop around. Look for the best deals.
There are lots of providers now and incredibly variable costs quoted for leases.
But one thing you can be absolutely sure of is that you’ll seriously benefit from lower tax liabilities as the result of driving electric.