Published: September 29th, 2021 in Budget/Finance News, Latest News
Although car manufacturers have been pushing people to switch to electric cars, there has been resistance within the UK. But with the current situation, manufacturers have revealed that enquiries into electric vehicles have risen by 1,600%.
The Fuel Shortage
The fuel shortage began after BP warned they would have to close some of their petrol stations temporarily. The cause of the issue is not a shortage of fuel, but a lack of drivers to deliver it. There is a lack of drivers because fuel tankers require additional training, and after the complexities of Brexit and the pandemic, many European drivers returned to their home countries. This triggered the general public to panic buy petrol, exasperating the issue even further.
The government have stressed that there is enough petrol but claim the media have inflamed the issue. And on Tuesday afternoon Boris Johnson said the situation was ‘stabilising’ and overall it will get ‘better on the forecourts’.
However, the fuel crisis shouldn’t be the only reason to consider an electric car.
Environmental Factors
The environmental factors are also very beneficial. Electric vehicles emit fewer greenhouse gases than petrol and diesel cars, even during their construction and accounting for the electricity production for the vehicle’s entire life.
Financial Benefits Of Electric Cars
And finally, our area of expertise, the financial benefits. A key advantage that not only small businesses will avoid, but everyone, is the rising fuel prices. Currently, the cost of fuel in the UK is at an eight-year high. And during the current situation, some petrol stations have been seen to hike prices to abuse the issue. Although energy prices will rise over the coming years, comparatively, the increase is much lower than the projected increases in fuel prices.
There are also financial benefits for small businesses. All new electric vehicles can claim Corporation Tax relief. This tax relief is available for both outright purchases and vehicle leasing.
When purchasing a vehicle outright for the first year, you will have access to full capital allowances on the car; this is currently set at 19%. So as an example, if the vehicle costs you £100,000, you would get £19,000 tax relief.
Leasing vehicles is slightly different. You can receive Corporation Tax relief on rentals as and when they are paid, plus you can claim back 50% of the VAT. But please seek independent advice before entering any agreement.
Another financial benefit is that company car tax BIK (Benefit in Kind) for electric vehicles will rise to 2% in April 2022 and be held at 2% for 2023/24/25.
