In 2020 the government changed the Benefit-in-Kind tax which made owning an electric company car advantageous – supporting the growth in the EV industry. 

 

For those unaware, Benefit-in-Kind (BiK) is a specific tax for employees who can receive company cars on top of their salary. So for anyone driving a company car which is driven for private use, you are expected to pay BiK.

 

The 2020 Changes

 

In 2020, the BiK tax was reevaluated and now abides by the stricter assessment, provided by the World Harmonised Light Vehicle Test Procedure (WLTP). 

This made zero-emission cars cheaper – falling from 16%-0% – and petrol and diesel vehicles more expensive – sitting in the 23-26% bracket. The changes to the BiK tax, therefore, made a considerable difference to the cost of owning an electric and non-electric vehicle.

Like normal road tax, BiK tax rates are based upon a car’s carbon dioxide emissions…the more emissions the more tax. 

Under these changes, for those who were lucky enough to buy a new electric company car in 2020, your BiK rate was 0%!

Since 2020, car tax rates have increased and will continue to rise over the years. Now in 2021, EV car tax rate is 1% and all bands have increased and will continue to increase in increments of 1%. 

As for diesel models however, these could be subject to a 4% supplement if they do not meet the standards of the RDE2 tests.

Therefore, EV owners save considerably more money over the years! 

Below is a table delineating the tax rates for 2020-2023.

Table of BiK percentage tax increase from 2020/21 to 2022/23

 

Ther Zappi EV Charger from Wessex ECOEnergy.  This British charger is a great option for homes and businesses see HERE for more info.

 

 

About Us:

Based in Dorchester, Dorset, Wessex ECOEnergy are an award-winning eco-build, solar, battery, and electric vehicle charger installer with a great deal of experience in the domestic and commercial markets. We help our clients to reduce their impact on the environment and save money in the process.

Interested in charger points? Email Wessex ECOEnergy for more details: info@wessexecoenergy.com.

Or call us on: 01305 250429