Drive Your Business Forward: The Electric Advantage with Aspire Accounts

May 20, 2024

Hey there, savvy business owners!

Ever thought about making the switch to electric cars for your business fleet? At Aspire Accounts, we’re all about helping you save money and boost your eco-credentials. Let’s dive into why going electric is not just a smart move for the environment but also for your wallet.

The 2% Benefit-In-Kind (BIK) Magic

First things first, let’s talk about the incredible Benefit-In-Kind (BIK) rate. If you decide to purchase an electric vehicle (EV) through your business, you’ll be thrilled to know that the BIK rate is just **2%**. Yep, you read that right! Compare that to the hefty rates for petrol or diesel cars, and you’ll see why this is a game-changer.

BIK is a tax on employees who receive perks (benefits) from their employer, and for company cars, it’s based on the car’s value and CO2 emissions. Electric cars, with their zero emissions, get this super low rate.

Tax Savings Galore!

Now, onto the juicy part – the tax savings. When you buy an EV through your business, you can benefit from:

1. Capital Allowances: You can claim 100% First Year Allowance (FYA) on new and unused electric cars. This means you can deduct the full cost of the car from your pre-tax profits in the first year.

2. Reduced National Insurance Contributions: With a lower BIK rate, the Class 1A National Insurance you pay on the car’s benefit is also lower. 

3. No Fuel Benefit Charge: Since electricity isn’t classified as a fuel for car benefit purposes, you avoid the fuel benefit charge, unlike with traditional fuel cars.

4. Grants and Incentives: The government offers grants for EVs, which can reduce the initial cost by up to £2,500. Plus, there are additional grants for installing charging points.

Low Running Costs

Electric cars are not only tax-efficient but also economical to run. Here’s why:

  • Lower Maintenance: EVs have fewer moving parts, which means fewer things can go wrong. This translates to lower servicing and maintenance costs.
  • Cheaper Fuel: Electricity is cheaper than petrol or diesel, especially if you can charge at off-peak times. Some businesses even install solar panels to make their charging virtually free!

Eco-Friendly Credentials

Driving an EV significantly reduces your carbon footprint, making your business greener and more attractive to eco-conscious clients. It’s a win-win situation: you save money and the planet.

How to Get Started

Ready to join the electric revolution? Here’s what you need to do:

1. Choose Your EV: There are many options available, from compact cars to luxurious sedans.

2. Check Out the Grants: Look into government grants to reduce your purchase costs.

3. Consult with Aspire Accounts: We’ll help you navigate the tax benefits and ensure you maximise your savings.

For more detailed information on the tax benefits and HMRC guidelines, check out the official HMRC page on electric vehicles.

So, what are you waiting for? Charge up your business strategy with an electric car and watch the savings roll in!

At Aspire Accounts, we’re here to power up your business with the best financial advice. Contact us today to learn more about how you can benefit from electric vehicles.