Company car
Benefit-in-kind tax

Vehicles

FACT: 100% electric vehicles are only taxed at 7%!

If you have a company car you are taxed on it as a ‘Benefit in Kind’ (BiK). This is based on the vehicle’s fuel type, CO2 emissions and total cost.

Full 100% of electric vehicles have had their tax set at a very low rate of 7% (i.e. you are taxed on 7% of the value of the vehicle). This will rise to 9% from 1 April 2017. Range extended electric and plug-in hybrid vehicles will also attract a reduced rate of tax, as they emit less CO2 compared to many conventional petrol/diesel cars, with many qualifying for the current low rate of 7%. More powerful plug in hybrids (which emit more CO2) still attract a relatively low rate of around 9%1.

By comparison, the average taxation rate on conventional petrol/diesel vehicles in 2014 was 18%2 - so that means more money in your wage packet every month and less paid out in tax when you go electric!

Check out our simple and straightforward savings calculator, to see how much you could save on your annual company car tax and when you take all of the savings into consideration when you go electric.

www.gov.uk

2 Energy Savings Trust

Fuel - company electric vehicles

FACT:  You do not pay any tax as a 'Benefit in Kind' if you charge your company car for free at your place of work!

Currently HMRC does not class electricity as a road fuel, so what they term as the 'Car Fuel Benefit Charge' does not apply to electric vehicle charging for company cars. If an employee charges their company car for free at their workplace, no benefit in kind arises, so it does not need to be reported to HMRC.

Fuel - private electric vehicles

FACT:  You do pay any tax as a 'Benefit in Kind' if you charge your own private vehicle for free at your place of work

Private electric vehicles are treated differently. If an employer provides electricity to an employee to charge their own private vehicle for free at their place of work, a benefit in kind arises and tax must be paid based on the cost of the electricity used. This must be reported to HMRC.

Chargepoints

If an employer funds the cost of having a chargepoint installed  at an employee's home, a benefit in kind arisies based on the value of the employer's funding. This applies to a chargepoint for either the employee's company or private electric vehicle.