HMRC wants people to go green wherever possible. As such they are rewarding people who drive more environmentally friendly cars.

So cars with lower CO2 emissions are taxed at a significantly lower rate compared to those with higher emissions.

The Benefit in Kind (BiK) tax on electric company cars is currently only 1%. 

As a result, employers and employees will make substantial savings on Tax and National Insurance.

This is how you could potentially drive a free electric company car this 2020/21 tax year, all paid for by HMRC.

The BiK tax will rise to only 2% in from April 2022.

Benefiting from a free electric company car won’t last forever, however you can still make huge savings over the next couple of years!

Option 1:

If an employee already drives a company car for business purposes and also has access to the car for personal use then the UK Government taxes for this benefit. 

The great news however is that should someone choose an electric company car, they will pay 1% Benefit in Kind tax for the 2021/2022 tax year. This rises to just 2% for the 2022/2023 tax year. 

Option 2:

 If you do not have a company car, do not worry. You can still access the benefits via a salary sacrifice scheme. The  employer and employee will need to sign an agreement (which EVision can provide).

The company pays for the car and the employee takes a reduction in salary.

The employer saves money on the reduction in order to pay for a fully electric company car.