Further to our recent correspondence, we have now completed this years P11D’s for our clients.
One question we have received from a few clients over the past few weeks is regarding the benefits of purchasing an electric vehicle. Many manufacturers are rolling out new electric vehicles and the incentive to move to electric from a tax point of view is clear to see.
Electric vehicles are generally 100% tax deductible through the company in the year of purchase, as opposed to non-electric vehicles where the corporation tax deduction is limited to around 6% per annum (depending on the make and model and the C02 emissions).
The benefit in kind that arises from having an electric vehicle is much less than a petrol or diesel vehicle.
The benefit in kind on a fully electric vehicle is fixed at 1% for the year to 5 April 2022 and then 2% for the following tax year.
Comparing an Audi A5 with an electric Tesla model 3 below shows the huge difference in taxable benefit in kind on the vehicles:
If you have any questions, please feel free to contact us.
Ben and Richard