As we roll into the new tax year it’s worth reminding ourselves that the UK Government has recently introduced a number of tax reforms aimed at increasing the number of pure electric vehicles (“EVs”) that form part of the company car vehicle parc (one that comprises an estimated 970,000 vehicles in the UK).
The tax reforms in question mean that those driving an EV as a company car will not have to pay any ‘benefit in kind’ tax to HMRC for FY20/21. Thereafter, BIK tax payments will only increase by one percent year on year up until April 2023.
This approach will, inevitably, incentivise employees to opt for an EV as their next company car whilst at the same time encouraging corporates to increase the size and range of their EV fleet in order to reflect positively upon their own green agenda.
Of course, a knock-on benefit of increasing the size of the company car parc, and putting more supply into the system, will be the development of the second-hand market for EVs. By boosting supply of second-hand EVs (at more affordable prices) it should follow that the overall demand for EVs will materially increase.