You might be jumping up and down with joy to know that no electric cars tax was deducted in 2020/2021. This may not be the case in 2020/2022, one must consider electric cars as a tax-efficient benefit in the long run. Let’s get into the details of everything.
How Electric Cars Get Taxed
If a car comes under private use, only then the car is considered as a taxable benefit. If you’re looking forward to knowing more about the taxable amount, you must be knowing already that any taxable amount is the appropriate percentage of the price of cars and accessories. You get to deduct a capital contribution of around £5,000. Note that if someone is not able to buy a car in any given tax year, the amount will be proportionately reduced. It’s reduced way more the moment someone figures out that the car is not available in a given tax year.
Let’s Work Out the Appropriate Percentage
Let’s thank all the authorities for the fact they’ve considered the amount of carbon dioxide emissions in this regard. The appropriate tax percentage definitely depends on the car’s CO2 emissions. If you take zero-emission cars into consideration, let’s just say that if the car was registered before or after 6th April 2020, the percentage of electric cars will be 1% for 2021/22. The rate was set at 0% for 2020/2021. When you take other things in perspective, it’s important to note that the tax cost of electric companies will be low in 2021/2022 as well.
Let’s Learn By Some Examples
Jaz has an electric car registered on 1st April 2020. The listed price is around £30,000. Take into account the fact that the date of car registration was 1st April 2020. The tax percentage of an electric car was 0% in 2020/2021. Jaz enjoyed the benefit of a tax-free car. Let’s just say that the percentage in 2021/2022 was around 1% Then the taxable amount would be around £300 (1% of £30,000) If Jaz is a high rate taxpayer, he pays just around £120 on the benefit of his company car. Let’s say, even if he’s a basic rate taxpayer, he’ll be paying around £60 in tax. This is altogether a very good deal if you take it into consideration.
Let’s Consider Low Emission Cars into Account
If you’re not interested in buying an electric car, it’s not a bad idea to say that you can choose a low emission model. This ensures that you can get a tax-efficient company car.. A low emission car model always works out. The CO2 emission measurement changed from 6th April 2020. If you want to know more about the tax percentage that applies to low emission cars in 2021/2022, take a look at the table below:
Appropriate percentage for 2021/2022 for cars with CO2 emissions of 1-50g/km
|Electric range||Cars first registered before 6 April 2020||Cars first registered on or after 6 April 2020|
|More than 130 miles||2%||1%|
|30 – 39 miles||12%||11%|
|Less than 30 miles||14%||13%|
You might have already observed in the table above that when you choose a car with a good electric range, your electric charges will automatically reduce. Hope the entire concept of taxes on electric cars and the percentage of the CO2 emission cars is clear in your head. We look forward to telling you about future taxation and how the economy affects all your tax decisions. Still unclear about some of these things. How about a quick call with our accountant. We’ll make sure there are no ambiguities left at your end.