EV in Business
In the UK, there are several business tax implications to consider when running electric vehicles (EVs), including:
Businesses can claim 100% first-year capital allowances for electric cars and vans, which means the full cost of the vehicle can be written off against taxable profits in the year of purchase.
Enhanced Capital Allowances
Businesses can claim enhanced capital allowances for electric vehicle charging points, which means the full cost of the charging point can be written off against taxable profits in the year of purchase.
Benefit in Kind (BIK) tax
If a business provides an EV to an employee for personal use, the employee is liable to pay Benefit in Kind (BIK) tax based on the list price of the vehicle and its CO2 emissions. However, the BIK tax rate for EVs is lower than that for petrol or diesel cars.
The purchase of an EV is subject to VAT at the standard rate of 20%. However, businesses can claim back the VAT on the purchase price of the EV if it is used exclusively for business purposes.
EVs are exempt from vehicle excise duty (road tax) in the UK, which can be a significant cost-saving for businesses that operate large fleets of vehicles.
For more information on this visit the Essentials Tax pages here…