Electric cars are creating a buzz in environmentally-conscious companies, and not just because of the noise they make. They are cheap to run and the price of many models is coming down.
If your employer provides you with an electric company car or van, we have some good and bad news for you.
Good: From 1 September 2018 your employer can pay you 4p per mile for every business journey you make in the electric vehicle. If you charge the vehicle at the company’s premises there is no taxable benefit for the use of that power. So you get paid 4p per mile for absolutely free fuel!
If you own the electric car personally you can also charge it for free at work with no taxable benefit for the use of the electricity. When you undertake business journeys in your own electric car your employer can pay you 45p per mile, tax free, for the first 10,000 business miles driven in the tax year, and 25p per mile for any additional mileage.
Bad: The amount you are taxed on for having free use of a company provided electric car is currently 13% of its list price when new, but this is due to leap to 16% of the list price for 2019-20. Strangely the taxable benefit will drop to 2% of list price from 6 April 2020.
If your company vehicle is an electric van, which you use for private journeys other than commuting, you are taxed on a benefit of £1,340 for 2018-19. This taxable benefit is likely to rise to around £2,000 for 2019-20.