How do electric vehicles benefit business owners?

If you’re a business owner, you may be wondering if it’s worth switching to an all-electric fleet of cars for your company

Switching to an all-electric car fleet has proven to be a very popular choice for businesses across the country, as it offers lots of compelling advantages and incentives.

Some of the benefits include cheaper tax, various government incentives, a workplace charging scheme, and cheaper overall running costs.

What are the advantages?

Cheaper to run than petrol and diesel cars

One of the main reasons electric cars have become so popular in the past few years is because of how much cheaper they are to run than conventional petrol or diesel-powered cars.

This is not just for fuelling up but also for general maintenance costs, which are far lower because of the fewer moving parts inside an EV’s engine bay.

This is especially important for businesses because if you have a fleet of cars, you could find yourself spending an absolute fortune.

Tax benefits

Buying an electric car(s) for a business means you can enjoy a few different tax benefits – which are very welcome indeed.

One of them is a 2% benefit-in-kind (BiK) tax rate, which lasts until April 2025. After that, it'll increase by 1% each year until it reaches 5% in April 2028. It'll then jump to 7% for the 2028/29 tax year and 9% for 2029/30.

This rate used to be higher at 16% but was reduced to zero in 2020, then 2% in 2022.

The current 2% tax benefit is far better than a petrol or diesel car too, with these rates starting at 20% and increasing based on the car's CO2 emissions.

EVs are also exempt from other charges and taxes, such as vehicle excise duty, fuel duty, and road tax.

What are the government’s incentives?

Travel/city driving incentives

If you live and/or work in London, you'll be well aware of the congestion charge and the ever-expanding Ultra Low Emission Zone (ULEZ) zone that surrounds large parts of the city.

Well, if you have an electric car, then you get to skip all of these. Currently, you get charged £15 a day for the congestion charge and a further £12.50 if you enter a ULEZ zone, but in an EV, you don’t get charged anything – resulting in a massive saving.

But even if you don’t live in London, you may still wish to pay attention because there are plans to introduce a ULEZ system into more cities, including Birmingham, Manchester, Bath, Oxford, and Bristol.

EV charging schemes

As a way to encourage the uptake of electric vehicles, the government has also set up two new schemes revolving around charging.

The first is the Electric Vehicle Homecharge Scheme, which discounts the cost of setting up an EV charge point at home by up to 75%.

The second is the Workplace Charging Scheme, which offers vouchers to those buying and installing charging points at places of work.