From 6th April 2020 the BIK rate for electrical vehicles will drop from 16% currently to 0%. With a commitment to only increase to 1% in 2021 and 2% in 2022. This will only apply to pure electric vehicles but also to vehicles with CO2 emissions of up to 50g/km and at least 130 miles of electric-only range.
It gets even better when you consider the provision of personal fuel. As with BIK percentages, the standard amount against which a personal fuel benefit is assessed is £24,100 for 2019/20. For electric vehicles provided as company cars, there is no taxing provision for private charging as “fuel” does not extend to electricity. Similarly, workplace charging (for private and company cars) will not give rise to a benefit in kind.
The employer can also, for example, pay for the following without a taxable benefit arising:
- A vehicle charging point to be installed at the employee’s home
- A charge card to allow individuals access to commercial or local authority charging points
As with all of our tax tips this information is necessarily summarised and of a general nature. If you would like detailed specific advice please get in touch.