NOVEMBER 2023 AFTERMARKET 57 www.aftermarketonline.net VACU ELECTRIC VA ON DEMAND POW UMP ACUUM PUMPS – D POWERFUL MAI WER INTENANCE FREE PASSION FOR TECHNOLOGY. ON DEMAND, POWERFUL, MAINTENANCE-FREE www.ms-motorservice.com of the total cost of ownership compared to if they purchased the same car privately. When an employee has a choice between cash and a perk and picks the perk, the employee will be taxed on whichever value is greater under Optional Remuneration Arrangement (OpRA) legislation. However, as the legislation excludes vehicles that emit 75g/km of carbon emissions or less, most electric vehicles would be exempt from this. So not only can employees get a new electric vehicle that can be used outside of work hours, but it could also save them hundreds of pounds every year in fuel, maintenance, insurance, and running costs. There are other benefits to company EV schemes as well. Not only can employees reduce their own personal tax bill by paying out more in their monthly pay cheque for lowemissions vehicles, but it can also mean businesses can increase the amount of Capital Allowances they can offset against Corporation Tax. While there’s no guarantee that the Benefit in Kind rate will continue to rise beyond 2028, in the short-term there are still significant income tax savings for both parties. Class 1A National Insurance savings are on offer for employers for at least the next three tax years, which could represent an attractive proposal. There are additional benefits for employers looking to provide charging infrastructure for staff electric vehicles. Employers can currently claim back 100% of their first year allowances on the installation cost of electric charge points, which could help convince the 75% of UK workplaces that currently don’t have a charge point installed to do so. Employees that use workplace EV charging facilities are also exempt from BIK tax, even if the journey they use it for is for non-business use. This also applies to personal EVs owned by employees and not just those with company cars,. For staff wanting to primarily charge their vehicle at home, employers can install a dedicated charge point at the employee’s home without paying BIK tax. However, the reimbursement of electricity used for private journeys would be taxable as it could be seen as funding part of their domestic energy bill. BIK Tax doesn’t have to be taxing Tax can be a minefield for the everyday accountant, never mind fleet owners and employees looking into EV company car schemes. When looking into EV company car schemes, it is important to seek professional advice from tax specialists, but there are some obvious and significant advantages for businesses seriously considering them. The case for offering employees EVs as company cars gets stronger by the day, and not just for those wanting a shiny new car. While schemes like this can help attract and retain staff, businesses can also help contribute to a cleaner, greener environment while employees save on large upfront costs and enjoy the benefits of switching to electric. www.aftermarketonline.net
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