Business Electric Car Lease Deals

As a Limited Company director, now is the perfect time to think about getting a brand new fully-electric car.

From April 2020, the Government have announced in the Draft Finance Bill that Benefit in Kind (BIK) tax on fully-electric vehicles will be reduced to as little as 0%. This will result in huge savings and is a real incentive to lease a new fully-electric car via your company.

With such a variety of electric cars to choose from now, we’ve had a look around to find some deals that would be ideal for taking advantage of this great tax saving!

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    Tesla Model 3 (Long Range AWD Model)

    Released recently, this 4 door EV has fantastic range and is almost certainly going to be one of the most popular cars on sale in this category.

    • Range: 295 miles
    • 0-62: 4.6 seconds
    • Doors: 4
    • Body Type: Saloon
    • Price Range: £495 per month ex VAT (4 stars)
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    Nissan Leaf

    Popular small family car. This is the gen 2 model and doesn’t have the greatest range but it’s fine for your daily commute and has plenty of space for the family.

    • Range: 135 miles
    • 0-62: 7.9 seconds
    • Doors: 5
    • Body Type: Hatchback
    • Price Range: £241 per month ex VAT (2 stars)
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    Renault Zoe (i GT Line R135 )

    Competent supermini with a maximum load space of 1225 litres should you need it.

    • Range: 195 miles
    • 0-62: 9.5 seconds
    • Doors: 5
    • Body Type: Hatchback
    • Price Range: £296 per month ex VAT (3 stars)
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    Hyundai IONIQ Electric (Premium 38kWh)

    Very affordable 5-door family car with a decent range.

    • Range: 160 miles
    • 0-62: 9.7 seconds
    • Doors: 5
    • Body Type: Hatchback
    • Price Range: £195 per month ex VAT (2 stars)
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    Tesla Model S (Long Range AWD Model)

    Classic fully-electric saloon with plenty of space for luggage. The Performance model will get to 60 in 2.4 seconds!

    • Range: 325 miles
    • 0-62: 3.8 seconds
    • Doors: 5
    • Body Type: Saloon
    • Price Range: £839 per month ex VAT (5 stars)

    Leasing an Electric Car Through a Limited Company

    As a business owner, leasing an electric vehicle through your limited company can be a very tax efficient way of getting that new car.

    Lease payments can generally be fully offset against your Corporation Tax bill and, if your company is VAT registered, half the VAT reclaimed too. Leasing works out more favourably than buying a vehicle outright through your Limited Company as, when buying, none of VAT can be reclaimed.

    The biggest tax burden has, historically, been Benefit in Kind (BIK) tax, an income tax charge based on the value of the benefit you receive from your company.

    This is calculated by multiplying the list price of the vehicle by a percentage BIK based on the CO2 emissions of that vehicle. The more environmentally friendly the vehicle, the lower the percentage.

    Depending on whether you’re a basic, higher or additional rate taxpayer, you would then have an income tax charge of 20%, 40% or 45% of the value of that benefit. You would also pay Employers’ Class 1A National Insurance (NICs) on the value of the benefit too.

    However, from April 2020, the Government have announced in the Draft Finance Bill that the BIK charge on fully-electric cars will be reduced significantly.

    • 0% BIK on all fully-electric vehicles in the tax year 2020-2021.
    • Increases to just 1% in 2021-2022 and 2% in 2022-2023.
    • BIK rates as low a 0% for least polluting hybrid cars with a zero-emission range of at least 130 miles.

    With the BIK percentage currently at 16% for the 2019/2020 tax year for vehicles with 0 g/km CO2 emissions, that represents a huge saving for limited company directors.

    More details on the new rates and how it works can be found here.

    With such a variety of electric cars to choose from now, we’ve found some great deals that would be ideal for taking advantage of this tax saving!

    * Range and 0-62 values from the database at ev-database.uk and indicate realistic real-world expected performance rather than manufacturer best-case figures.