Government incentives for plug-in electric vehicles - eAnswers

Government Incentives for plug-in Electric Vehicles

Vehicles / July 24, 2015

Financial Benefits of Zero Emissions Vehicles

Electric cars represent a cleaner, greener way to use everyday transport. But they also offer compelling financial incentives for business and personal purchasers. These benefits include:

100% First Year Allowance (FYA)

The First Year Allowance is claimable for up to 100% of the cost of qualifying low emission and electric cars, including Tesla Model S (electric vehicle). That means that if you choose one of Tesla’s range of all-electric vehicles as your company car, your business has the ability to claim a 100% year one deduction for the cost of the vehicle.

The First Year Allowance is applicable to new vehicles only, and those considered new despite previously being used – for example vehicles registered as a sales or service demonstrator by the manufacturer.

In the 2016 UK Budget, the Government announced that 100% FYA for businesses purchasing low emission cars will be extended for a further three years to April 2021.

UK Plug-in Car Grant

The ‘Plug-in Grant’ is a purchase subsidy of up to £4, 500 which is deducted from the purchase price of new Tesla vehicles.

Class 1A National Insurance Contributions and Company Car Tax (CCT)

Class 1A NICs based on the vehicle's P11D value and relevant BIK rate are applicable as determined by the official CO2 emissions and fuel type.

Zero UK Road Tax + London Congestion Charge Exemption

Tesla vehicles are 100% electric with zero emissions so they are exempt from the London Congestion Charge (once an initial £10 registration fee has been paid).

Salary Sacrifice

Salary Sacrifice enables employees to sacrifice some of their gross salary in order to receive the benefit of driving a fully electric, high performance Model S as a company car. Because the sacrifice is executed before tax and National Insurance contributions are applied, employees effectively save money in the acquisition of their new car in a similar way that other savings such as Childcare, gym membership or cycle-to-work schemes operate.

From a company’s perspective, this scheme provides an opportunity for organisations to offer employees a brand new, fully maintained Model S at a lower cost than they could achieve in the retail market in a tax efficient way. The company may also benefit from reduced National Insurance contribution payments from the scheme.

Salary Sacrifice is either offered by the employee or the leasing provider and is not a Tesla financial product.

Advisory Fuel Rates

As electricity is not classed as a road fuel, the car fuel benefit charge does not apply to electric charging. If an employee uses a company car, no benefit in kind arises on charging their vehicle at the workplace.

If an employer provides electricity to an employee to charge their personal car, a benefit in kind arises equating to the cost of the electricity used.

Significantly Reduced BiK Taxation for Company Car Drivers

Company car tax is designed to encourage employers and company car drivers to choose cars with lower levels of CO2 emissions; incentives are offered both to the company and to the recipient of the vehicle.

The company car tax payable by an employee is based on the vehicle's P11D value multiplied by the appropriate BiK rate (determined by the car's CO2 and fuel type) and the employee's income tax rate providing significant savings over high CO2 emitting vehicles.

Battery electric vehicles offer the lowest BiK rate of any fuel type.

Supercharger – Convenient long distance travel

Supercharger stations are strategically placed to minimise stops during long distance travel and are conveniently located near restaurants, shopping centres and WiFi hot spots. Superchargers provide up to 170 miles of range in as little as 30 minutes. Each station contains multiple Superchargers to help you get back on the road quickly.

Scottish Customers – Energy Savings Trust Loans

The interest free Electric Vehicle Loan, funded by Transport Scotland, currently offers drivers in Scotland loans towards the cost of purchasing a new plug-in electric vehicle.

More information: Electric Vehicle Loan / Low Carbon Transport Business Loan

Customer Stories

Hear from actual customers about their experiences with Tesla. Including experiences in Great Britain and all over the world.

For further information contact
Tesla Corporate Sales

Further clarification on the application of any benefit or incentive should be discussed with your financial advisor given your specific business and accounting circumstances. This information is provided in good faith and is not to be considered financial advice, and it is the users’ responsibility to observe all applicable laws and regulations.

This information is intended as a general summary only, the customer’s experience may vary; it is not exhaustive and should not be relied on, in whole or in part, for investment or financial decisions. The specific circumstances of any person or entity should be discussed with the relevant financial advisor.

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Tesla Motors Limited is authorised and regulated by the Financial Conduct Authority for credit broking. Firm registration number 677768. Tesla Motors Limited acts as a credit broker and introduces customers to lending partners for Hire Purchase. Tesla Motors Limited registered office and postal address is 197 Horton Road, West Drayton UB7 8JD.