ELECTRIC CARS AND HMRC – ARE THEY TAX DEDUCTIBLE IN THE UK?

Wondering about whether electric cars can help reduce your tax bill? In this video Dan runs through the general rules and how the tax credit works.

Topics include:

HMRC rules electric cars
Electric car tax relief
Are electric cars tax deductible uk
Tax relief on electric cars
Electric cars tax credit
Capital Allowances
That Tesla for your limited company

… and more!
If you have any questions on this, please comment below.

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[martinmallet]

I think you can fit another bottle on your shelf

[leotheangrylion]

Does BiK only applies to new electric car? I have a Ltd company but I don’t have £60, 000 sitting there in my company account. However, I can afford to spend no more than £30, 000, so can I buy a used EV get the same benefits?

[Steve-rcey]

As a director of a 1-person UK limited company, am I allowed to purchase an EV company car through my limited company and use it for 100% personal use? And still get the Tax benefits like 100% write off in the first year and the 2% BIK?

P.s Great video!

[kedi_bruce]

Hi there. I run a VAT-registered limited company with an annual turnover of £100k. I've been eyeing a Porsche Taycan (EV) worth £100k and I'm really tempted to make the purchase. What do you think? :/ (note: I'm in IT industry and cannot find any expense)

[vango]

With corporation tax going up to 25% or marginal rate over 50k - is it better to take relief on the depreciation over 'x' years rather than 19% full first year allowance? Massive thanks for all your excellent videos to date.

[oatzman]

Hi, fantastic video!

I am an area manager and I've been given a decent ev to drive.
I have had to self-fund a home charger.
Do you think there is anyway that I can claim tax relief on this, even though I am not a business owner?

The car is used 80% business, and 20% personal.

[dennislu]

Hi thanks for your excellent video, I am a sole trader for my main job and a higher rate tax payer. I also have a small limited company for buy to let properties. Would it be better to buy an EV as sole trader and claim 90% business use as a higher rate tax payer or would it be better to do it through limited company ? Many thanks

[karbot]

I am struggling to get an answer to this can you help.
Sole traders
BCP v lease, the BCP contract has no optional final payment only a compulsory “balloon” this allows smaller monthly payments with you ending up owning the car. HMRC guide is a bit vague. but if i use this route rather than outright purchase how much capital allowance is allowed in yr 1?
Example :
Car 80k
Initial payment £30k
Monthly payment £500 x 36
Balloon £30k

Ideally I need to reduce gross profits by as much as I can ?

[saurabhmehta]

Great video, If a limited company buys the electric car fully and claims 100% capital allowance in first year, does the company have to then pay tax on the depreciation amount in second year ( ie is depreciation added in profits). For eg if company bought electric car of 50 K and took that off the profits for capital allowance ( whole 50 k 100%), do they have to pay tax on depreciation ( tax on approximately 17 K ) in second tax year . And what happens in 3rd and 4rth Year ? Because tax will be due on whatever amount is received when company sells the car as well .Thanks

[oscaryuen]

If you use hire purchase on a second hand car, how would the tax relief work. I understand you wont get FYA, but does it still come off the value before cooperation tax?

[lyracrafts]

Thank you for the video - great advise, do you offer Adcock advise for a fee of course .. ?

[danieln]

Hi, great video.
If I lease an EV through my Ltd company, is the initial deposit payment on the lease also tax deductible from corp tax?
You mentioned in the video about claiming back electricity costs for charging the EV, I charge the EV at home so how would I work out what to claim back and what paper trail is needed as the electricity usage obviously includes charges for the whole house? Do I still need to keep a mileage record for business travel ?

[smarshallsay]

Thanks for the great video!
I used to be a full time freelancer and so have my own Ltd, however in recent years I have been working mostly in a 9-5 in a permanent role. I still have my Ltd though and do occasional work on the weekends through it. This means that I only ever have a few k in my business bank account. Is it still beneficial for me to lease a car via my company or will it be more of a headache as only a little money comes through the company?

[roscopeco]

I am seeing more and more schemes for salary sacrifice. I am in slightly odd position of being a LTD business owner and also being employed. Neither are in the higher rate tax bracket on their own, is there benefit to salary sacrifice vs Thru limited company?

[sneakerhead]

Great video! I’m a director of a small limited company. I currently lease a diesel vehicle. The only thing I claim is mileage. When my lease runs out I want to look at leasing an EV on a BCH agreement. Apart from getting tax relief on corp tax on the monthlies, is there anything else you can claim relief on? I’m not VAT registered. Can I claim for insurance/vehicle maintenance? Can I still claim the 45p per mile for business miles? Would I need to pay BIK?

[farnazmotamedi-hm]

Thanks for the informative video.
I have a question, if my limited company has 25K and I want to buy a 55k electric car. Can I personally loan 30k to the limited company and carry the losses forwards in years 2/3 until the company has paid me back the loan for the car. Would this still be 100% tax deductible in years 2/3? Thanks

[TheRealMrLaserCutter]

Thanks for the video, does the limited company pay all the insurance? How is the personal use of insurance get accounted for?

[adamholt]

Hi - Thanks for this video, helpful! I do have a question - here is my context - I own a limited company of 2 directors in the and we're ending month 4 in our existence and doing really well so far. We're trying to be as sensible and tax efficient as possible. And whilst I don't want to take on excessive risk early, i do need to get rid of my diesel guzzler. So I'm very interested in an EV through the company.

What I need to understand is when you say BUY what does that specifically mean? I'm actively trying to minimise my corporation tax bill and projecting forward for end of year 1 trading I'm looking at £30 - 40k CT on profit. Does that mean I am limited to 'buying' a car that is total value no greater than 30-40k if i want the 100% CT relief via capital allowances?

What if I 'buy' it over 3/4 years? does that not count?

In terms of funding a purchase, realistically given short trading time, I will need to take a personal loan, then inject that into the business as a directors loan in order to buy the car. Is there an issue there?

I think a video specifically on the mechanics of how to best go about procuring the EV would be a great idea ... I can't be alone in thinking this!

Thanks

[markzaccaria]

Hiya, so in a ltd company 100% price of the vechicle can come off your profits to reduce profits so pay less tax, what about the second year.. is it based on the car value in the second/third year?.. great video :-)

[bird.consultancy]

Are the lease payments only 18% deductible? vs. The outright 100%?

£60k 100% deductible?
£1000pcm 18% deductible?