Just 1 in 4 company car drivers know EVs are ‘tax-free’

In the current financial year, zero-emissions electric cars incur a zero percent Benefit in Kind company car tax rate – yet few fleet drivers actually know about it

Company car drivers who choose a zero-emissions electric car pay zero Benefit in Kind tax for the 2020-21 financial year.

But despite this massive saving going live in April 2020, still only 25 percent of company car drivers are aware of the incentive.

When the tax-saving initiative was explained to them, more than four in 10 said they would be more likely to choose an EV as their next company car.

It was research by Go Ultra Low, the joint industry and government campaign to promote electric vehicles, that uncovered the findings.

Many employees said they were frustrated by their employer’s lack of environmental awareness, and more than two thirds said they were eager for their companies to be greener.  

There were some positives – 75 percent of companies have recycling bins and half of them have removed single-use plastics – but many firms are still lagging when it comes to EVs.

MotoringElectric has explained in detail the Benefit in Kind changes that came into force in April 2020.

Briefly, they involve reducing the 2020-21 BIK tax rate from 16 percent to zero percent. Even in 2021-22, it only increases marginally, to one percent.

Over a three-year company car deal, it could save drivers over £19,000 in Benefit in Kind tax.

Although electric cars are more expensive than regular cars, savings are made elsewhere, not least dramatically reduced fuel costs. Employers also save from Clean Air Zone charges and the London Ultra Low Emissions Zone.

There’s even a government Workplace Charging Scheme that gives businesses up to £350 per electric vehicle charging socket they install.

Not to mention the massive amounts of tax they will save employees…


How much company car tax will I save with an electric car?

What are the pros and cons of an electric car?

How do you drive an electric car?

Related Articles


Please enter your comment!
Please enter your name here




Hyundai electric cars: FAQ

Here’s what you need to know about Hyundai’s range of electric cars, including prices, equipment and charging speeds.

How do I find my nearest electric car charger?

Whether you're using an app or a map, we list the ways you can locate the nearest electric car charger.

Honda e long-term review: report 1

Our first report on living with a Honda e. How does the fashionable electric car fare in regular use? We'll be finding out.

Which electric cars can use Ionity high-power 350kW chargers?

The Ionity network of 350kW ultra-rapid chargers is the fastest way to recharge your electric car. But which cars can take advantage of the technology?

What is the difference between kW and kWh?

If you're confused by the difference between kW and kWh, don't worry, you're not alone. Here, we attempt to explain what each one means.