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Five-year amnesty from company car tax for electric vehicles

posted on Dec 16 2009 by Jade Hensby

Five-year amnesty from company car tax for electric vehicles

No BIK (Benefit In Kind) tax on electric cars The Pre Budget Report announced that there will be a 5 year amnesty from company car tax for electric vehicles. The Chancellor's announcement welcomed by fleets as mainstream manufacturers are to begin offering electric cars from as early as 2010.

It's great news for Company car drivers as they could take advantage of a five-year exemption from BIK tax on their vehicle by leasing an electric car in 2010.In current schemes, drivers who are provided with an electric company car face a BIK tax bill of nine per cent - the lowest band possible but still 9% tax at the end of the day.

But according to tax experts, the new rule will save a basic rate taxpayer driving a company-provided electric car will save 264 a year, while the employer will save about 200 a year in National Insurance contributions.The major manufacturers are planning to introduce electric vehicles during 2010, with Mitsubishi, Peugeot and Citroen all offering their own versions of the Mitsubishi i-MiEV electric car by the end of the year, and as soon as the prices are released we will be offering contract hire prices at our normal low lease prices.

One real pain right now is the company / private mileage recording but with the new excemption for electric lease cars 'There will be no need to keep detailed business mileage records to demonstrate that only limited private use has been undertaken.'Earlier this year, the Government also announced a subsidy of up to £5000 for electric vehicles from 2011, which is likely to encourage take-up by fleet operators even further.

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