 Photo by Andrew Roberts on Unsplash | Whilst we’re not clear what the next budget has in store, I’m pretty sure that tax incentives in some shape or form will be around for some time to come for green vehicles. With electric (not hybrid) cars becoming more and more advanced and new models due in the new year, the following allowances might be useful: |
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. 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 2021, claim 100% first year allowance and the driver does not have a taxable benefit from April 2020. Let’s see what the budget brings but it’s definitely worth considering going green!
- The 2019/20 taxable benefit for a zero emissions car is 16%
- From April 2020 cars with an emissions rating of 0 will reduce to 0% (draft legislation)
Charging points also qualify for Capital Allowances.
The planning point here is that your business can buy outright an electric car by April 2021, claim 100% first year allowance and the driver does not have a taxable benefit from April 2020. Let’s see what the budget brings but it’s definitely worth considering going green!
RSS Feed