 Photo by Andrew Roberts on Unsplash | This is where it gets more interesting, for Company Director owners of businesses, I have been advising that the taxable benefit for a car is becoming prohibitive in many cases (and fuel is a definite no), however the latest draft legislation suggests the following benefit for electric only cars: |
Until 1 April (5 April 2021 for income tax) a low or zero emission car can qualify for a 100% first year allowance (FYA) if its CO2 emissions do not exceed 50g/km and the car is purchased new and unused.
For electric cars only, the 100% allowance is now extended to 31 March 2023 which gives businesses the opportunity to plan when they start to recover.
A similar 100% FYA applies for zero emission vans, where the vehicle is purchased new and unused before 1 April 2021, or 5 April 2021 for income tax. However, as all commercial vehicles qualify for 100% relief under the AIA, this special FYA for zero emission goods vehicles is not needed by the majority of businesses.
This is where it gets more interesting, for Company Director owners of businesses, I have been advising that the taxable benefit for a car is becoming prohibitive in many cases (and fuel is a definite no), however draft legislation (bearing in mind the forthcoming budget) suggest the following benefit for electric only cars:
Charging points also qualify for Capital Allowances.
The planning point here is that your business can buy outright an electric car by April 2023, claim 100% first year allowance and the driver does not have a taxable benefit from April 2020 and a very low (1% then 2%) benefit thereafter. This contrasts markedly with some diesels that have a benefit charge of 37%!
For electric cars only, the 100% allowance is now extended to 31 March 2023 which gives businesses the opportunity to plan when they start to recover.
A similar 100% FYA applies for zero emission vans, where the vehicle is purchased new and unused before 1 April 2021, or 5 April 2021 for income tax. However, as all commercial vehicles qualify for 100% relief under the AIA, this special FYA for zero emission goods vehicles is not needed by the majority of businesses.
This is where it gets more interesting, for Company Director owners of businesses, I have been advising that the taxable benefit for a car is becoming prohibitive in many cases (and fuel is a definite no), however draft legislation (bearing in mind the forthcoming budget) suggest the following benefit for electric only cars:
- From April 2020 cars with an emissions rating of 0 will 0%
- From April 2021 cars with an emissions rating of 0 will be 1%
- From April 2021 cars with an emissions rating of 0 will be 2%
Charging points also qualify for Capital Allowances.
The planning point here is that your business can buy outright an electric car by April 2023, claim 100% first year allowance and the driver does not have a taxable benefit from April 2020 and a very low (1% then 2%) benefit thereafter. This contrasts markedly with some diesels that have a benefit charge of 37%!
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