Company Car Leasing and Electric Vehicles

Why choose electric cars for company car leasing?

Electric cars are an excellent choice for company car leasing, offering both financial and environmental benefits. Leasing electric vehicles (EVs) can significantly reduce running costs, as electricity is cheaper than petrol or diesel, and EVs have fewer moving parts, leading to lower maintenance costs. For businesses looking to improve their corporate social responsibility (CSR), electric cars produce zero tailpipe emissions, contributing to reduced carbon footprints and a more sustainable business model. Additionally, electric vehicles offer access to government incentives and tax breaks, making them a cost-effective option for company fleets.

What tax benefits are available for electric company cars?

There are several tax advantages available for electric company cars in the UK:

• Benefit-in-Kind (BIK) Tax: Electric cars attract significantly lower BIK rates compared to petrol or diesel vehicles. In the 2024/25 tax year, BIK rates for fully electric cars are set at just 2%, making them highly attractive for company car drivers and businesses looking to reduce tax liabilities.
• VAT Reclamation: If the vehicle is used solely for business purposes, businesses can reclaim 100% of the VAT on the leasing costs. For cars used for both business and private purposes, 50% of the VAT can be reclaimed.
• Zero Road Tax: Fully electric vehicles are exempt from Vehicle Excise Duty (road tax), reducing overall running costs.
• Congestion Charge Exemptions: Electric cars are exempt from congestion charges in cities like London, making them ideal for businesses operating in urban areas.
• First-Year Capital Allowances: Businesses can claim 100% of the first-year capital allowances on electric cars, allowing them to deduct the full cost from taxable profits in the first year of ownership or lease.

These tax benefits make electric company cars a financially smart choice for businesses looking to reduce operating costs and tax liabilities.

What are the best electric cars for company leasing?

The best electric cars for company leasing offer a blend of efficiency, range, and modern technology. Top models for businesses in 2024 include:

• Tesla Model 3: With a range of up to 360 miles, cutting-edge technology, and a premium feel, the Tesla Model 3 is a top choice for executives and business fleets.
• BMW i4: This luxury electric saloon offers up to 365 miles of range and delivers excellent performance, making it ideal for company executives.
• Volkswagen ID.4: A practical and spacious SUV, the ID.4 offers a range of up to 320 miles, making it suitable for businesses needing both efficiency and comfort.
• Hyundai Ioniq 5: Known for its futuristic design and advanced technology, the Ioniq 5 offers a range of up to 315 miles and is perfect for company fleets.

These models provide a range of options depending on your company’s needs, from executive travel to efficient fleet operations.

How do charging infrastructure and maintenance work for company fleets?

Setting up charging infrastructure and managing maintenance for an electric company fleet is becoming easier, thanks to advances in EV technology and government support:

• Workplace Charging: Many businesses are installing EV chargers on-site to ensure convenient charging for employees. The UK government’s Workplace Charging Scheme (WCS) offers grants to cover part of the cost of installing charging points at business premises.
• Home Charging for Employees: For businesses that offer company cars to employees, home charging points can be installed, allowing employees to charge vehicles overnight. The cost of home charging can be reimbursed by the employer.
• Public Charging Networks: For employees on the move, the UK has a growing network of public charging stations, including fast and ultra-rapid chargers, making it easy to keep company cars charged while travelling for business.
• Maintenance: Electric vehicles generally require less maintenance than petrol or diesel cars, as they have fewer components that wear out. Lease agreements often include maintenance packages, covering servicing, repairs, and breakdown cover, simplifying fleet management for businesses.

By investing in charging infrastructure and utilising the low-maintenance benefits of electric vehicles, businesses can streamline fleet operations and reduce ongoing costs, making electric cars a practical choice for company car leasing.