Reduced Company Cost
Introducing low emission vehicles to your fleet can significantly help your businesses tax profile
See how introducing BEVs and PHEVS can make a difference in your fleet costs
Alongside the benefits to the environment, transitioning electric vehicles into your fleet can also make significant savings to your businesses fleet costs.
The savings vary based on whether the vehicles are:
BEVs
Battery Electric Vehicles with zero emissions
Vehicle Excise Duty (VED)
All BEVs are exempt from VED costs until April 2025. From April 2025, the first year rate is only £10.
Capital Allowances
Zero-emission vehicles are eligible for 100% first-year capital allowance.
Leasing Rental Disallowance (LRD)
Both BEVS and PHEVs are eligible for 100% tax relief allowed against the rentals, compared to only 85% for cars with a CO2 greater than 50.
Benefit in Kind (BiK)
BEVs fall within the lowest BiK calculated bracket for company car drivers, only 2% from April 2024/25 tax year, rising to only 3% in 2025/26 tax year.
PHEVS
Plug-in Hybrid Electric Vehicles with under 51g CO2 per km
Vehicle Excise Duty (VED)
PHEVs fall into the next lowest VED band with a first year cost starting from £110.
Capital Allowances
PHEVS are eligible for 18% Written Down Allowance, compared to only 6% for cars with a CO2 greater than 50g.
Leasing Rental Disallowance (LRD)
Both BEVS and PHEVs are eligible for 100% tax relief allowed against the rentals, compared to only 85% for cars with a CO2 greater than 50.
Benefit in Kind (BiK)
PHEVs fall into the next lowest BiK bracket for company car drivers, depending on the EV range capability. Currently, the PHEVs with the greatest range fall within the 70-129 BIK range and are only 5% BIK in 2024/25 tax year, rising to 6% in 2025/26.
Even the poorest range sub 51 CO2 PHEVs are only at 14% in 2024/25 and 15% 2025/26.
Aside from tax, there are significant savings to be made on ‘fuelling’ your electric vehicles compared to their petrol or diesel equivalents. The average electric car costs 7p per mile (home charging), compared with up to 21p for a combustion engine.
For more information on Advisory Fuel Rates, see here.
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