Company Car

To go electric or not - that is the question.

To go electric or not - that is the question.

New vehicle buyers are facing the dilemma when they walk into a car showroom. Do they opt for full electric, a hybrid or stick to the tried and tested petrol or diesel?

The incentives around them take some unravelling and the switch or not question has probably become the most asked query of colleagues over the past six months.

The Government's decision that no new petrol or diesel car will be sold after 2030 is driving the push towards electric.

Associate partner Sinéad Catchpole said: “In the past, the advice has generally been to steer clear of the company car.

“It was heavily taxed and, for a number of clients over the years, when you highlight the amount per month in tax per mile it leads to a sharp intake of breath.

“I have even had a couple of clients ditch the company car and then had to explain to spouses that the accountant told them to!

“They ended up with commercial vehicles instead, hence the large number of “smarter” vans on the roads.

“The electric vehicle question and discussion often crops up because the tax incentives are great. But then there is the range fear, logistics around charging, residual values, and their premium cost.”

It has meant electric Porsches and high-end vehicles have been popular although, increasingly, day-to-day electric models are coming into the equation, said Sinéad.

“As with most “lifestyle” taxes there isn't always a right or wrong answer. It depends on individual circumstances and the amount of annual motoring they do,” she added.

Issues to consider when buying an electric car

It is critical to know the following about the vehicle prior to purchasing:

The emissions position

The stated electric range according to HMRC

The full retail price of the car and any extras

The finance arrangements

The above play a part in deciding, from a tax perspective, whether the company purchase is worthwhile or not. It is certainly well worth a discussion before driving off the forecourt in your new car!

The HMRC calculator looks at the impact of these factors on your personal tax.

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