Advertorial feature from SMMT
Businesses could give their company car drivers a welcome pay boost by encouraging them to opt for an ultra low emission vehicle.
The savings in Benefit in Kind (BIK) tax alone could equate to more than £3,000 over three years for 40% taxpayers. Take, for example, a diesel car that emits 99g/km of CO2 and has a P11D price of £24,000. Over the next three years, a 40% taxpayer would pay £4,608 in BIK. By opting for a pure electric vehicle, that figure falls to £1,470. That’s a saving of £3,138.
There are significant fuel cost savings too. A driver who travels 8,000 miles per annum in a diesel car, achieving an average of 50mpg, might pay £87 a month for fuel. In an electric car, the monthly charging cost would be £9 on the current Economy 7 Tariff. That adds up to a monthly saving of £78. The cars may be more expensive to buy, but significantly cheaper running costs build a compelling case for these vehicles in fleets, especially when their use is optimised.
Making sure that fleet ULEVs are well utilised is vital if the cost benefits are to be truly realised. It is possible to drive a 100% electric vehicle for as little as 2p per mile. Fuel costs issued by the AA put 2013 petrol costs per mile between 12.67p and 21.80p per mile depending on the engine size. So, that is £2 to do 100 electric miles versus £12 - £21 for the same journey powered by petrol.
Government also covers 75% of the cost of installing chargepoints at people’s homes. And some suppliers are even paying the remaining 25% – making the chargepoint completely free.
If the driver lives or works in central London they will qualify for a 100% discount for the Congestion Charge (subject to an annual £10 registration fee). There are also Class 1A National Insurance savings for the employer, based on the car’s BIK tax band.
Individuals or companies either leasing or outright purchasing electric vehicles will benefit government’s grant of up to £5,000 towards the cost of the vehicle. Simply using the vehicle’s list price or monthly rental cost could mean that an ULEV appears more expensive than a standard diesel but, when running costs are taken into account, it could be significantly cheaper.
Savings to consider
- Lower fuel costs (from 2p a mile)
- Reduced National Insurance contributions
- Lower Benefit in Kind tax
- Lower maintenance costs
- Free parking and public charging inselected locations
- (visit GoUltraLow.com for more information)
Go UltraLow is a campaign by government and the automotive industry to educate consumers and businesses on the benefits of ultralow emission vehicles.