Peter Rayney reviews the tax efficiency of electric company cars and other eco-friendly vehicles.
As we emerge from the Covid pandemic, there is even greater focus on the Green agenda. The government aims to ban petrol, diesel and many types of hybrid car by 2040. To provide fiscal encouragement to make the ‘switch’ to electric, there are tremendous tax breaks for electric vehicles and this looks likely to continue for the foreseeable future.
For all these reasons, there has been a marked uptake in the provision of eco-friendly ‘company’ cars, with tax now becoming the main driver in the choice of car.
Electric cars: Tax breaks for employees
A taxable benefit in kind (BIK) arises normally where employers provide directors/employees with a company car which is available for private use. The BIK charge generally