Grab the Carrot before the Stick gets Thicker
Electric car costs, are they all that bad? As I write this, it’s about 3 weeks until Christmas. Lists and letters are being written to Santa, whilst he and his elves are working hard (sustainably too, I hope!). Remember to leave out some milk and cookies for Santa, and some carrots for the reindeer too!
Who Would Have Thought that HMRC is the one Supplying all the Gifts?
I’ll be the first to admit, a present from HMRC is hard to believe. Let’s be fair though, taxation has always been a stick to drive government policy… and the carrot? It has always been there, it’s just not as visible. However, from April 2020, the carrot is huge – in the form of electric cars! With NO company car tax in 2020, 1% in 2021 and 2% in 2022. This applies equally to traditional company cars as well as employee-funded car schemes. It opens up EV’s to 20 million workers in the UK, whether or not they need a car for work.
Let’s Look at the 2 Scenarios…
If you’re an ‘essential user’ you currently have a diesel option. Typically, a 40% taxpayer will pay nearly £500/month company car tax. Factoring in the mileage, insurance, class 1a NIC and diesel, your car will cost your employer £800/month. It’s a hefty bill and one on the increase! Anyone of the premium electric cars would perfectly suit this demographic! From the iconic Jaguar I-Pace to the range defying Tesla Model 3. These cars can have a higher lease cost than a diesel BMW. But including class 1a NIC and fuel savings, it’s a level playing field for the employer! Worst case, the employee may need to contribute a little from their huge £500 company car tax savings.
If you’re concerned about driving further than 200 miles in an electric, don’t be! Find out about charging or our electric flex (we have blogs for both!).
For Traditional Employees (and in general!) Electric Car Costs Definitely Hold Up
The average UK worker drives less than 200 miles a week; the typical electric car covers 200 miles on a single charge. This 200 miles costs around £30 in petrol or diesel. However, charge off-peak at home and that cost will plummet to £5!
As we all Know, an Electric Car Costs More to buy, but do they Actually?
Well, if you’re buying an Electric Mini or Golf it’s less than the equivalent diesel after government grants! How mad is that? If you go via your employer on a scheme like ours, you get tax and NI savings. This means that the same electric Golf or Mini will cost you around £300 a month all in! That’s about the same as a 4-5-year-old Golf GTD loses each month in depreciation alone.
This Christmas we’ll even give you a week’s diesel hire a year for when you need a bit more range. Whether it’s for your annual family holiday or just a couple weekends away, we’re happy to help. If you need more time in the traditional car, we can even increase this for a small contribution.
However, time is of the essence. The low tax rates on this benefit won’t last forever. They’re set until 2022, and lead times are pushing out.
What Happens After that?
Well, we expect HMRC to remain in the Christmas Spirit for a few more years. But again, it’s only a matter of time! Maybe they’ll revert to being Scrooge at the end of the next decade? Whenever they go back is when the benefits reduce, and incentives disappear! Get your money’s worth, while you can!
Give your employees the perfect Christmas present this year, and we’ll get you the perfect electric car in time for Easter! The Easter Bunny will thank you, as will the planet, all in all, it’s an eggcellent idea!
But Then again: Why Grab the Carrot When you can Grab the Stick?
Join the electric revolution and be at the forefront, leading the EV race! You could help drive the nation out of their dirty diesels and petrols! Download a guide: