Incentives for business

An electric car offers lots of advantages for business, from simple running and maintenance costs to tax benefits.

Running costs

Although electric vehicles are more expensive to buy, they have significantly lower running costs when compared to petrol or diesel equivalents.

The British Vehicle Rental and Leasing Association has calculated that depending on when and how an electric vehicle is charged it will cost 2-4p per mile to run. This compares to 10-14p per mile for an equivalent petrol or diesel vehicle. Therefore on average the fuel costs based on an annual mileage of 10,000 would be:

  • petrol/diesel - £1,200 (based on 12p per mile)
  • electric vehicle - £300 (based on 3p per mile)

Tax benefits for business

The table below sets out the current tax treatment of electric vehicles and clearly shows the benefits for businesses. A current list of tax exemptions available can be accessed through the Office for Low Emission Vehicles (Department of Transport) at the attached link:

https://www.gov.uk/government/publications/ultra-low-emission-vehicles-tax-implications 

Measure Electric vehicles
Fuel duty Exempt (N/A)
Vehicle excise duty Exempt (as tailpipe emissions are less than 100gCO2/km)
Company car tax Employees and employers exempt (from income and national insurance contributions respectively)
Van benefit charge Employees and employers exempt (from income and national insurance contributions respectively)
Fuel benefit charge Exempt (N/A)
Enhanced capital allowances 100 per cent first-year allowance – business can relieve entire cost of an electric car or van against taxable profits in the year of acquisition

Sales and after care

Electric vehicles have very few moving parts therefore they require very little maintenance. This is a considerable cost saving, especially as cars get older.

Image benefits

The impact of climate change and the green economy are concerns for consumers and businesses alike. Moving to electric vehicles gives businesses the chance to become associated with an innovative and exciting project that addresses these issues.

Plug-in car and van grants

Significant grants, of up to £5000 off the price of a new electric car and up to £8000 off the price of a new electric van, are available.

Battery hire

There are electric vehicles on the market that offer battery hire options, which reduces the initial purchase cost and makes the car more affordable.