Are you considering making the switch to an electric car in the UK? If so, you are not alone.
Electric vehicles (EVs) are gaining popularity as more people recognize their environmental benefits and long-term cost savings. Nonetheless, buying an electric car is not just about the vehicle itself; it is also about understanding the various tax benefits that come with it.
The good news is that the UK government has introduced several incentives to promote the adoption of electric cars, making them an attractive choice for individuals and businesses. In this article, we will explore the exciting world of electric car tax benefits in the UK, uncovering the potential savings and financial advantages of going electric.
The Tax Perks for Electric Cars in the UK
The Benefit-in-Kind Tax
Benefit-in-Kind (BiK) tax is a significant point to ponder for anyone driving a company car. In simple terms, it is essentially the tax you pay on perks or benefits that come with your employment, which are above and beyond your annual salary. A company car is one such perk. The rate of the BiK tax is determined by several factors, one of them being the carbon dioxide emissions of the car.
This is where electric cars steal the limelight. As zero-emission vehicles, they command the lowest possible BiK rate. For the tax year 2020 to 2021, fully electric cars attracted a BiK rate of 0%. This rate, although planned to rise to 2% for the years 2021 to 2023, remains drastically lower than for their petrol and diesel counterparts.
As a result, this is where Bonnet comes into play. By providing businesses with an uncomplicated EV charging solution and access to real-time fleet data, Bonnet helps businesses efficiently manage a fleet of electric vehicles. This advantage, when coupled with the lower BiK rates, amplifies the economic perks for businesses and employees alike, making electric vehicles a top choice for company fleets.
The Electric Vehicle Homecharge Scheme
Another incentive worth mentioning is the Electric Vehicle Homecharge Scheme (EVHS). This scheme offers grant funding of up to 75% towards the cost of installing electric car home charging points. It is a significant cost reduction for those who prefer the convenience of charging their electric cars at home.
The EVHS, combined with the Bonnet app’s extensive network of charging stations, means drivers will always have a convenient option for charging their vehicles, whether at home or on the road. This flexibility further enhances the convenience of owning an electric vehicle, reinforcing their financial and practical advantages.
The Vehicle Excise Duty
If you happen to be a private car owner, you will most probably be quite familiar with Vehicle Excise Duty (VED), colloquially known as car tax. All in all, it is an annual tax on car ownership. However, VED is non-existent for fully electric vehicles with a list price of less than £40,000. This exemption can save private electric car owners several hundred pounds each year.
The best electric car charging app can further enhance these savings by providing access to a comprehensive network of charging points at standard rates. This clarity and transparency in pricing, plus the convenience of locating EV charging points, help electric vehicle owners manage their operating expenses effectively.
The Plug-In Car Grant
The Plug-In Car Grant is one of the most significant incentives for purchasing an electric car in the UK. Introduced by the government, this grant aims to make such cars more affordable and accessible to a wider range of consumers. The grant provides financial support towards the purchase price of eligible electric cars, reducing the upfront cost and making them more competitive with traditional petrol and diesel vehicles.
To qualify for the Plug-In Car Grant, the vehicle must meet certain criteria set by the government, including emission levels and battery capacity. The grant substantially contributes to the purchase price, typically covering up to a certain percentage of the vehicle’s recommended retail price, up to a specified maximum amount. Meanwhile, the exact amount of the grant varies depending on the electric vehicle category. As a result, this financial incentive significantly reduces the cost barrier for potential EV owners and encourages the adoption of electric vehicles across the country.
The Bottom Line
In a nutshell, the electric car tax benefits in the UK make owning an EV an appealing option for both individuals and businesses. From the reduced Benefit-in-Kind tax to the exemption from Vehicle Excise Duty and the financial support through the Plug-In Car Grant and the Electric Vehicle Homecharge Scheme, there are numerous incentives to make the switch to electric. Not only can you contribute to a greener environment, but you can also enjoy long-term savings and a more affordable ownership experience.
While navigating the world of electric cars and tax benefits may seem overwhelming, the Bonnet app is here to simplify the process. With access to a vast charging network, transparent pricing, and dedicated support, Bonnet’s platform makes the transition to an electric car seamless and hassle-free. Whether you’re an individual looking to optimize your tax savings or a business seeking to embrace sustainable transportation solutions, Bonnet is your trusted companion on the journey to electric mobility.
Embrace the future of transportation, reduce your carbon footprint, and enjoy the financial advantages of electric cars. The UK’s electric car tax benefits, combined with Bonnet’s user-friendly app and comprehensive charging network, make it easier than ever to join the electric revolution. Hence, take the leap, experience the thrill of electric driving, and reap the rewards of a cleaner, more sustainable future. The power is in your hands.
