Should You Buy an Electric Vehicle for Your Business?

With the ban on selling new petrol, diesel and hybrid cars in the UK being brought forward by the Government to 2030, it’s now more important than ever for businesses to consider how they can do their bit to support the UK’s EV (electric vehicle) infrastructure.

To help you out, we’ve taken the time to look at the two key factors for business owners looking to purchase electric vehicles for business: cost and charge time.

GREEN INDUSTRIAL REVOLUTION

In the wake of the Coronavirus pandemic, a series of clean energy initiatives have been developed to create a Green Industrial Revolution to aid the economic recovery from the pandemic. The 10 point-plan to achieve this involves generating greener energy, optimising homes and reducing emissions from transport.

This includes bringing forward the date from which there will be a ban on selling fossil fuel vehicles in the UK from 2035 to 2030.By doing this, the aim is to accelerate the transition to electric vehicles along with other incentives that make electric vehicles more accessible.

DOES IT MAKE FINANCIAL SENSE FOR BUSINESS OWNERS TO BUY AN ELECTRIC VEHICLE?

As well as doing your bit to save the planet, electric vehicles (EVs) make good financial sense when they are bought through your business – either as a company car or as part of a fleet.

Benefit in Kind tax plays a big role in businesses purchasing EVs.

Company car tax is a tax on the Benefit in Kind (BiK) that an employee receives through the provision of a car for their personal use. If an employee receives a company vehicle that is available for personal use, the employee must pay some tax on the benefit they receive from this.

BiK rates are based on the car’s P11D value (its list price including optional extras, VAT and delivery charges, minus the first-year registration fee and annual VED (  – car tax) multiplied by the percentage banding the car sits in. Read more about BiK tax.

Because Benefit in Kind makes a significant difference on an individual’s monthly wage, it represents a good tool for the Government to encourage the adoption of electric vehicles for business.

The current rates for BiK for full electric cars are:

2021/22 – 1% company car tax

2022/23 – 2% company car tax

For hybrid vehicles, it’s slightly different. They also attract a lower BiK but on a sliding scale that considers the CO₂ emissions and the vehicle range (how many miles the car can do in-between charges). The cars with the most range attract a lower BiK rate.

In addition to this, organisations receive a 100% First Year Allowance (FYA), allowing you to claim back a 100% reduction from the first year of purchase of a brand new EV. This means the cost of buying the EV counts towards your taxable profits.

You’ll also be exempt from Congestion Charge Zones and be able to use Ultra-Low Emission Zones (ULEZ), which is another financial benefit you could receive from incorporating electric cars into your business. This currently creates a saving of £15 a day and is planned to run until 2025. Together, these incentives balance out the initial challenges of switching from diesel and petrol vehicles.

Of course, in the short term EVs are more expensive than petrol or diesel alternatives, but the cost per mile is considerably less (up to a third of the price), meaning EVs can actually be more cost effective in the long term.

ELECTRIC VEHICLE GRANTS FOR BUSINESSES

The Government is also offering a Plug-in Grant to assist you with the initial investment in EVs. This covers £2500 towards the cost of each electric car that’s under the value of £35,000. Cars eligible for this grant must have CO₂ emissions below 50g/km and be able to travel a minimum of 70 miles (112km) with zero emissions.

And this isn’t just for cars; there is also an offer of up to £3,000 for small electric vans and £6,000 for large vans. For a van to be eligible for the Plug-in Grant, it must have a CO₂ emission below 75g/km and be able to travel a minimum of 16km (10 miles) with no emissions. The idea behind this is to encourage you to make the first step to switch to EVs and to help make the transition easier by significantly lowering the upfront costs.

In addition to the Plug-in Grant, you can also apply for the Workplace Charging Scheme. This can reduce the cost of installing electric car charging points by up to £14,000. It comes from the Office for Low Emission Vehicles (OLEV) and allows businesses to install up to 40 charging sockets; the grant provides £350 towards each socket.

WHERE CAN I CHARGE MY EV LONG DOES IT TAKE TO CHARGE?

Many people ask, ‘How long does it take to charge an EV?’. With three different varieties of EV Chargepoints available (slow, fast and rapid), it completely depends on which charger you use and which EV you have.

We are starting to see more and more charging stations popping up in our local communities, which is great to see as it makes it more viable for us all to switch.

It’s worth checking ZapMap to find the nearest charging point for you.

SHOULD I CONSIDER INSTALLING AN EV CHARGER AT MY BUSINESS PREMISES?

If you run a business, there could be a lot of benefits to installing EV charge points in your business.

We support across all phases of business Electric Vehicle charging solutions, including:

EV Charging Point Installation

Hassle- free installation from expert engineers.

300 Rolec Products

We work with Rolec EV to provide exceptional charging solutions for businesses.

Business Energy Supply

Tailor your electric vehicle charging points and energy supply to your exact requirements. Opt to step up your sustainability strategy with a 100% renewable electricity plan.

Maintenance and Warranty

We provide 24 hour after sales support and a three-year warranty.

Reporting and Recommendations

We help you manage your data by providing insight and recommendations into your energy usage, tariff- setting advice and customisable pricing options.

 

Get in touch with us to find out more about electric vehicle charging.