How high can tax on an EV company car go before it no longer makes sense? How about twenty times higher?
Last year the BiK rate was zero, this year it’s 1%, and from next April it’s 2% of the List Price. That is incredibly low, lower than it has ever been. And we expect rates to stay around that level until 2025.
But clients still ask what’s next? Well who knows, logic would suggest it will rise after 2025, but we think only slowly?
We’ve done some maths to compare personal leasing to salary sacrifice on a range of EVs for 20% and 40% taxpayers, assuming the employer retains the NIC saving and with ETI in place, and the results are below. You can see that even at 20% of the List Price, the EV still works better on salary sacrifice (if only just).
(To caveat these numbers we’ve made a number of assumptions including that rules don’t fundamentally change, we’re using current list prices, rentals, etc (in practice these are likely to fall over time) and zero business mileage)