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No company car tax!

That’s right there is no company car tax on electric cars for tax year 2020/2021.

As an incentive to reduce the CO2 produced by cars the Government has introduced an extremely generous tax regime on electric company cars.

For any electric zero emissions car the company car tax you pay for tax year is Zero. This does change for tax year 2021/2022 but goes from zero to 1% of the P11D value of the vehicle and the following tax year 2022/2023 this increases to 2% of P11D value. Compare that to an average car even hybrid which you pay 20-30% of P11D value the savings are huge.

If we take a couple of examples of a mid range car and an executive car ayou can see the differences below.

a Volkswagen e-Golf Auto standard car with a P11D value of £31020 the tax for the next three financial years is as follows.

Tax year 2020/2021 - BIK percentage = 0%. Monthly tax payable (20% taxpayer) = £0.00
Tax year 2021/2022 - BIK percentage = 1%. Monthly tax payable (20% taxpayer) = £5.17
Tax year 2022/2023 - BIK percentage = 2%. Monthly tax payable (20% taxpayer) = £10.34

If you were then to compare this against the equivalent petrol Golf Hatch 1.5 TSi EVO Match Edition Manual which has a P11D Value of £23890. The tax for this car for the next three financial years is as follows.

Tax year 2020/2021 - BIK percentage = 28%. Monthly tax payable (20% taxpayer) = £111.49
Tax year 2021/2022 - BIK percentage = 28%. Monthly tax payable (20% taxpayer) = £111.49
Tax year 2022/2023 - BIK percentage = 28%. Monthly tax payable (20% taxpayer) = £111.49

Looking at the executive sector and taking the example of a Tesla Model 3 Auto standard car with a P11D value of £42850 the tax for the next three financial years is as follows.

Tax year 2020/2021 - BIK percentage = 0%. Monthly tax payable (40% taxpayer) = £0.00
Tax year 2021/2022 - BIK percentage = 1%. Monthly tax payable (40% taxpayer) = £14.28
Tax year 2022/2023 - BIK percentage = 2%. Monthly tax payable (40% taxpayer) = £28.57

If you were then to compare this against a traditional diesel executive car in the same price bracket a Mercedes E220d AMG Line Premium Saloon Auto which has a P11D Value of £42250. The tax for this car for the next three financial years is as follows.

Tax year 2020/2021 - BIK percentage = 34%. Monthly tax payable (20% taxpayer) = £478.83
Tax year 2021/2022 - BIK percentage = 34%. Monthly tax payable (20% taxpayer) = £478.83
Tax year 2022/2023 - BIK percentage = 34%. Monthly tax payable (20% taxpayer) = £478.83

Call or email to discuss your new electric company car.

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Posted on 8th November 2019 at 4:20 PM

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