Company Car Tax Rates Remain Low For EVs until 2028
The government has announced in their recent Autumn Statement for 2022 that company car tax rates for electric vehicles (EVs) will remain low until April 2028. In the latest statement, benefit-in-kind (BIK) rates will increase by 1% year on year from 2025/26 until 2027/28 in an effort to encourage uptake on electric vehicles.
BIK for a pure electric vehicle is 2% for the current tax year (2022/23) and remains at that rate up to April 2025. The recent announcement means that it will increase to 3% in 2025/26, to 4% in 2026/27, and 5% in 2027/28. This is good news for company car drivers and businesses who are now able to plan for the next few years, and take advantage of low benefit-in-kind tax when opting for an electric vehicle
There are more EVs on the market now than ever before (battery electric vehicles +38% year on year to end of November 22, SMMT) and with this increase in cars, comes the improvement of mileage ranges, technology and charging infrastructure advances.
This has allowed for electric cars to be more accessible for many people, and especially anyone who needs to commute or travel longer distances. As the choice in electric vehicles has increased over the last few years, more businesses are opting to go green with their company car fleet. There are great financial and ESG benefits (environmental, social and governance) for employers.
In addition, employers can also take advantage of the tax-efficient nature of electric vehicles by offering their employees a vehicle salary sacrifice scheme. A salary sacrifice car leasing scheme is a tax-efficient way to offer employees a non-cash benefit. It works by essentially “sacrificing” part of an employee’s salary in exchange for an EV. By offering this scheme, businesses can meet their sustainability goals, reduce their carbon emissions and offer a great staff benefit to retain their best talent, all while saving money in the process.
Overall, however, with tax rates staying low and EVs becoming more popular, it’s easy to see why businesses are choosing to electrify their fleet. At Synergy we have a great range of electric cars to choose from. Contact our friendly and professional team today for more information on how we can help your business and reward your staff today.