It won’t be around forever
As individuals, we all have a responsibility for the world we live in and adopting environmentally friendly habits is becoming second nature. The days of diesel and petrol vehicles are slowly coming to an end as more of us adopt a much cleaner way to travel, through hybrids and fully electric vehicles. Electric vehicles have come a long way over the years, a Tesla can be seen on the majority of your trips and is certainly easy on the eye.
The government are incredibly keen to reduce air pollution and encourage people to switch to electric vehicles. In order to ease this transition and meet their goals The EV Homecharge Scheme was introduced in 2010 and the Workplace Charging Scheme in 2016. The Office for Low Emission Vehicles (OLEV) has made it clear, however, that these grants will not last forever.
Since it first came out, the homecharge grant has halved and the same is true for the Workplace scheme, how long the grant will be on offer has not been specified, we encourage all business owners to take advantage of it while they can.
At Blaby Electrical, we are now certified to fit Rolec EV charging points in domestic, commercial and industrial sites under the Homecharge and Workplace Charge schemes from OLEV.
Commercial and Industrial Charging Points
Deloitte[1] predicts there will be a requirement for 28,000 new charging points to accommodate the expected growth. With a giant surge in demand expected we need to be prepared, offering Charge Points at your place of work will soon be a requirement. So better to take advantage of the grant while it is available!
At the moment you can take advantage of The Workplace Charge Scheme from OLEV. It allows up to 40 charging points to be installed, that is £350 per socket- and you don’t need to have any EV cars registered to your business.
Offering EV charging, irrespective of the amount you have has the potential to create a better workplace for your employees, and provide a premium service to your clients, visitors and other user groups who have been granted access to your stations.
If you want a site review to see how many charging points you can have, then get in touch with Blaby Electrical for a free site survey and recommendations
Company Cars: Prepare for 0% BIK Tax in April 2020
Electric cars as of April 2020 will now attract 0% P11D value followed by 1% the following year and 2% the year after. With projected savings estimated at 95%, this is possibly the best time to make the transition.
The Benefit in Kind (BIK) tax rates that are being introduced have the potential to save companies and employees a substantial amount of money. According to estimates, a fleet of 900 petrol or diesel cars could save more than £1.9 million annually! If you’re business has company cars, this is something you’ll need to know.
At the moment electric vehicles are at 16% P11D value which means typically for an electric car, such as the Tesla Model 3 Basic Edition (which costs around £53,000 brand new), this would mean a class 1A NIC. The cost to the company would be £1,170 and then a personal tax cost to the employee of £1,696 if they are basic rate tax payers or £3,392 if they are higher rate tax payers or even £3,816 for additional rate tax payers.
From 6th April 2020 this will drop to 0% P11D value meaning both the class 1A NIC and the personal tax are at £NIL.
The car will also attract corporation tax savings at currently 19% – the savings will depend on if you buy or lease, but if this was bought outright then this means £10,070 is available in capital allowances, as well as the ability to reclaim a proportion of VAT on the car.
Homecharge Scheme- making the leap to fully electric
For individuals, the upfront cost of buying an electric vehicle isn’t the cheapest- the vehicle itself will probably add another £10,000 to your budget. However, you will save on fuel costs, depending on certain factors you can travel 100 miles in an electric vehicle from under £2, compared to the best-value £12 in a petrol-powered vehicle. The maintenance of the vehicle and road tax also have the potential to save you around £440 per year. After the initial outlay, depending on the number of miles you travel you will see the cost savings coming back in.
If you’re one of the millions of company car drivers in the UK, then as the new tax year approaches you may be ready to convert to your fully electric vehicle as BIK tax drops to 0%, meaning you could save £1,696 if you’re a basic rate tax payer or £3,392 for higher rate tax payers or even £3,816 for additional rate tax payers.
To put it into perspective for individuals, an average employee on a higher-rate tax (40%) with a diesel hatchback company car, with a value of approximately £30,000, can currently expect to pay just over £18,000 in tax and fuel costs over a four-year period.
For a comparable electric vehicle, the employee total cost of ownership, which includes the cost of BIK tax, the cost of fuel for business and private mileage less any business mileage reimbursement received, reduces to £916: a saving of 95%!!!
Get Ready to Charge
Many of people with hybrids will already have a Charge Point, but for those making the switch you can save the cost of installing a charge point. Under the Homecharge scheme from OLEV you can receive a grant for up to £350. The criteria for being eligible for this grant are extensive! Having been through this process numerous times, at Blaby Electrical we can do the application on your behalf. After all, being able to charge at home is a lot cheaper than doing it at one of the charge points.
If you want to find out if you meet the criteria for the Homecharge grant- then get in touch and one of our team will be able to assist you.
[1] REF: https://www.fleetnews.co.uk/amp/news/car-industry-news/2019/10/10/large-fleets-could-save-19m-a-year-by-going-electric-says-deloitte[1]