The launch of BMW’s new electric Mini is imminent. A celebrated design icon built in response to a long-forgotten fuel crisis finally converts to eco-friendly energy. It’s hailed as a bonafide people’s car – a versatile 181 bhp run-around with a 145-mile range and all the groovy chic that comes with the Mini brand.
Here at our Manchester base, we continue to utilise the latest innovations in technology so of course we are very interested and excited by BMW’s latest eco-friendly venture.
The age of the cool, affordable Electric Vehicle has arrived.
Look closely, and you’ll find almost every car builder is adding EVs to their range. Big automotive brands can no longer ignore what EVs may mean to the wellbeing of the planet and to their customers. Public opinion is changing fast alongside legal changes that will increasingly punish polluters in clean air zones that are implementing throughout the UK.
As the shrill voices of the environmental lobby ring in our ears, as the world burns and ice shelves melt; it’s difficult to ignore the growing evidence. Something has to change.
That’s why it’s time for me to update you about EVs and their implications for the tax you’ll pay.
A ‘No Brainer’
Changes to the company car tax rules were announced in July 2019 and were mostly positive in tone. The move is designed to encourage businesses to invest in EVs. The new tax arrangements effectively slash the benefit in kind (BIK) taxation for company cars to zero. Yes, you read that right. Employees who opt for an eco-car will pay a 0% BIK tax rate, irrespective of the car brand.
Look at the differences here: a £100k Tesla Model S will attract a 0% company car tax from April 2020, while a similarly priced Mercedes-Benz S450L AMG Line will cost the driver an eye-watering £13,116 a year in BIK tax (based on the current C02 emission ratings). The benefits soon become bloomin’ obvious.
One of the immediate effects of the announcement was a significant increase in EV sales. According to figures from the Society of Motor Manufacturers and Traders, sales of fleet-bound EVs doubled in the wake of the announcement.
Changing to a company EV will soon become what’s known as a ‘no brainer’.
The good news is that infrastructure changes to support the use of EVs are also accelerating. Cities and businesses are investing in high capacity charging points with plans to increase the network considerably. Add in the increased operating range of today’s EVs and objections re lack of practicality soon ebb away.
There are advantages for those who need to range further and opt for a modern hybrid car. Take the new BMW X5 xDrive45e, with an electric range of 54 miles. This will now fall into the 6% tax band, unlike the previous model that had a 20-mile range and attracted 12% tax.
Whatever way you look at it, green transport has become an attractive option.
One slight caveat is that the 0% EV is only a one-year deal. The rates increase from 2021. Similar to rail pricing, the tax will edge up annually. For example, the BIK tax on a Nissan Leaf will be between £54-£122 in year two, then £109-£245 the year after. Nevertheless, it’s still considerably cheaper than the fossil fuel alternative and, I suspect, will do little to impede the wholesale move to fleet EVs.
And while it’s true electric cars may cost a little more; it’s a small price to pay to improve our air quality and save our precious planet.
If you need some help working out how a change to a cleaner, greener fleet will help your business and employees, why not call my team today on 07792 686479 or email me at email@example.com. Let’s talk about how we can help you to do your ‘bit’ for the environment.