Electric car tax explained

Electric car tax benefits explained

Electric vehicles aren’t just great for the environment, but they also help drivers and businesses save money by providing income tax incentives and other benefits. This blog will discuss all the different types of benefits provided to electric car users including:

  • Road tax benefits
  • Tax on Benefits in Kind
  • EV congestion charge exemption
  • EV charging tax relief
  • Electric van benefits
  • Government grants and allowances
  • Privately owned electric cars

Electric car road tax

Electric vehicle road tax is paid by the individual and depends on the type of electric car, and when it was registered. For vehicles that are 100% electric, no Vehicle Excise Duty (road tax) is applicable. This will continue until 2025.

Road tax is also not applicable to any cars registered between 1st March 2001 and 31st March 2017 that have an emission lower than 100g / km. Hybrid cars registered after this period have to pay road tax, and rates vary between £0-135 a year, depending on how much carbon dioxide emission the car produces.

BIK on electric cars

Benefits in Kind refers to company benefits employees receive in addition to their salary, and these are often taxable. Car related benefits in kind tax is linked to how much carbon dioxide emission the car produces, so if you have a petrol car with a CO2 rating of 145g /km, your benefit in kind will be higher compared to an electric car as you’ll be producing more emission.

Currently, both pure and hybrid electric vehicles that can travel up to 131 miles on a single charge have a BIK tax of 1%, this is set to increase to 2% in 2023. However, for hybrid cars that can only last 30 miles on a single charge, the BIK tax increases for up to 13%. An additional Income Tax charge is payable for company car drivers that have their fuel paid by the employer.

Class 1A National Insurance Contributions

When offering a company car benefit, employers have to pay a National Insurance Contribution of 13.8% on the total value of benefits provided, which for a normal vehicle include the car and the fuel. However, if the vehicle offered is an electric car, the contribution will be massively reduced – helping save costs.

EV congestion charge

Congestion charges vary between cities, with London having a daily £15 per vehicle, from 7am -10pm. Electric cars however do not have to pay this charge, so company fleets or those offering cars to employers can massively save on this by in clean air zones anytime they want.

Capital allowance

The government provides a 100% First Year Allowance until 31st March 2025 to all low emission and electric cars. This refers to businesses being able to claim up to 100% deduction on their vehicles’ first year’s costs. This means cars that produce a CO2 emission:

  • between 51-110g/km, can claim up to 18% of allowance
  • higher than 110g/km, can only claim 6% of allowance
  • lower than 50g/km, can claim 100% of the allowance

This means all the cost incurred to a business during the first year of holding the car can be returned.

EV charging tax relief

Although there aren’t any tax relief benefits for electric vehicles currently, with businesses charged a standard VAT of 20% and individuals charged 5% for their electricity – companies don’t have to pay for fuel duty which is 58p per litre before tax due to electricity not being classified as fuel.

Workplace EV charging

There is no taxable benefit for businesses of providing free electricity to employers to charge their vehicle at the workplace. The exemption criteria include:

  • Businesses must have a dedicated charging point
  • The charging points must be at or near the office/workplace
  • Charging must be available to all employers

The exemption however does not apply to reimbursements offered to the employee for vehicle charges away from the workplace.

Electric van

As of 2021, electric vans have no tax implications even when used for personal reasons outside of business hours.

Government grant

To promote the uptake of electric vehicles, the government has introduced a plug-in car grant that provides up to £2,500 towards the cost of a new electric car that costs up to £35,000. A £3,000 grant is available for small vans, while a £6,000 grant is also available for large vans. However, to meet the criteria, the vehicle must:

  • Have an electric range of 70 miles
  • If hybrid, it must also have a combined CO2 emission no more than 50g/km
  • Only a few of the hybrid PHEVs are eligible, but all major full BEVs are

Privately owned electric cars

If the employee uses their own electric car for business travel, the employer can reimburse 45p per mile for the first 10,000 miles driven in the year, while any additional travel is paid at 25p per mile.

The employee will also be entitled for an Electric Vehicle Homecharge Scheme grant that covers 75% of the cost of a charge point and installation per household.

We hope this guide has been useful in providing you insights into the tax related benefits of owning an electric car. Check out our blog for more industry blogs and insights.

Finally, if you think a fuel card could benefit your business, get in touch with our team of experts for support. Or browse our range of fleet services and upgrade your business’ technology stack.

Benefits of FORS

FORS: What is it and how does it benefit fleets?

Securing valuable accreditations that are well-regarded in the fleet industry is one way you can quickly ramp up the authority of your company’s fleet, and one of the most respected accreditations you can get your fleet set up with is the Fleet Operator Recognition Scheme (FORS).

In this blog we’ll take you through the various levels of FORS accreditation you can achieve, as well as the benefits the Fleet Operator Recognition Scheme has for both fleet drivers and managers.

What is FORS?

The Fleet Operator Recognition Scheme (FORS) aims to ramp up standards in fleet operations with a focus on areas such as road safety, fuel efficiency, and carbon emissions. Measuring performance in these areas give fleets an opportunity to demonstrate the positive advancements they are making, which is not only valuable for reputation but also for both driver safety and environmental responsibility.

To gain the FORS accreditations, you must simply prove that you are meeting the requirements of the level of accreditation you are looking to achieve.

FORS Accreditations

There are three tiers of FORS accreditation: bronze, silver and gold. Each tier builds upon the last and has a different set of requirements to demonstrate best practice in specific ways.

The standards for each tier of FORS accreditation are outline below:

Bronze Accreditation

For the bronze accreditation, FORS will audit your company; offering you tools and resources to help you pass. After you pass this audit, you will achieve your bronze FORS.

To start, you simply need to register your business at the FORS website. Then download the standards documentation to get to grips with what the audit will check and the standards you’ll need to meet. FORS will audit your company within 90 days of registration.

Silver Accreditation

In order to achieve silver accreditation, you will need to meet all the standards outlined in the bronze accreditation as well as ensuring your fleet is compliant with CLOCS Standard for Construction Logistics and the TfL Work Related Road Risk.

Whilst more in-depth than the bronze FORS audit, the process is the same and the information and guide can be found online at the website.

Gold Accreditation

The highest standard of compliance, the gold FORS accreditation requires you to also promote the FORS standard through your supply chain. You must additionally demonstrate meaningful improvements from your Silver accreditation.

Benefits of FORS accreditation

Benefits for fleet drivers

Fleet drivers can put to good use the vast range of courses and e-learning opportunities offered by FORS, helping them to improve and maintain a high standard of driver competency and safety. These learning opportunities can help fleet drivers become more aware and mindful of the safety aspects of their driving (benefiting themselves and other road users), as well as their impact on the environment.

Courses include:

  • Beyond Compulsory Basic Training – for delivery drivers in urban environments.
  • Safe Urban Driving – for commercial HGV operators.
  • TruckSmart – for commercial HGV drivers.
  • VanSmart – for commercial van drivers.
  • LoCity Driving – for commercial HGV and van drivers.

Benefits for fleet operators

For fleet operators, FORS also offers a range of courses and e-learning opportunities that can be useful in improving their performance in their role.

  • HGV/PCV Fleet Management Essentials – for supervisory staff working to achieve O Licence.
  • Car/Van Fleet Management Essentials – for supervisory staff operating car and van fleets.
  • Toolbox Talks – to help operators communicate with their staff.
  • Collision Management – Road Risk Champion and Collision Investigator.
  • FORS Practitioner – series of workshops designed for transport managers.

Saving money with FORS

Other than the clear safety benefits that come with operating at a FORS worthy standard, holding a FORS accreditation can also save your business money. From reducing incidents and accidents to reducing fuel spending, FORS can help your fleet make small but impactful changes that will quickly turn into savings for your company too.

FORS can help your fuel consumption by teaching fleet operators useful ways to track fuel usage, and teaching fleet drivers tactics for how they can drive in a less consumptive manner, like cutting down time spent idle and being tactical with driving speeds and journey planning. Good for both the environment and the company bank account.

Fleet management tools from Fuel Card Services

Put the new skills you learn through your acquisition of the FORS accreditations with software and telematics systems that will complement and assist your fleet management. From managing fuel spending and consumption with our Mileage Count, to keeping track of driver safety and habits with TeleGence telematics, we can help support you in managing your fleet efficiently and effectively, with money saving opportunities across the board.

If you are interested in learning more about what we offer or would like some support in choosing the right fleet management tools for your fleet, get in touch today.

Electric charging points

Electric charging points: a guide for UK businesses

Amidst technological advancements, and growing pressure from consumers and the government to make steps to reduce climate change, the electric vehicle market has grown exceedingly fast and is showing no sign of slowing down. In 2030, there will even be a ban on new sales of petrol and diesel cars in the UK, meaning UK businesses of all shapes and sizes must prepare to make the shift to electric.

For commercial fleets in particular, electrification can bring about many advantages. For example, you can expect to pay £4 per 100 miles for an EV compared to £14 per 100 miles for the same-sized petrol or diesel car. With cheaper running costs, and a wealth of environmental benefits, it’s no wonder businesses are placing a greater focus on EV technology.

However, it’s a new area for many, and businesses are loaded with questions around infrastructure, costs, compatibility, and charging times. That’s why we’ve created this guide to electric charging points, which should help you get up to speed. Read on to learn about:

  • Different types of chargers.
  • Electric vehicle charging stations.
  • How your business could benefit from having electric charging points installed.

Different types of EVs

Depending on the type of electric vehicle you own, the charging infrastructure and capabilities of your fleet will vary. The main types of electric vehicles include:

  • Battery Electric Vehicles (BEVs): These are the most common EVs, with over 462k cars estimated on UK roads. These cars are powered by a battery or motor so are charged from an external power source and have no emissions.
  • Plug-in Hybrid Electric Vehicles (PHEVs): These hybrid vehicles have a petrol or diesel engine as well as a battery that can be charged, which means that they can use either source of power to drive. There are an estimated ~384k PHEVs on UK roads.
  • Hybrid Electric Vehicles (HEVs): In comparison to the other two types of vehicles, this EV does not require to be plugged in to charge. Instead, the electric battery or motor is charged through regenerative braking. This is why these vehicles are sometimes described as ‘self-charging hybrids’ since they do not need to connect to an external power source.

Types of EV charging points

There are four distinct types of electric vehicle charging – slow, fast, rapid, and ultra-rapid. This charging is categorised into either direct current (DC) or alternating current (AC).

  • Slow: 3 kW-6 kW of slow charging that can take between 6-12 hours to fully charge your vehicle. This method of charging is most commonly found at home, where there isn’t a time restriction for when you need your vehicle to be charged as this can be completed overnight.
  • Fast: Typically rated 7kW, taking 4-6 hours to charge, or 22kW, which takes 1-2 hours. These chargers are popular in car parks of shops, supermarkets, or offices, making them the most obvious choice for business owners.
  • Rapid: Rated 22-50kW, rapid chargers can refill an EV battery to 80% in around 40 minutes.
  • Ultra-rapid: Charging 80% of the car in 10-15 minutes, ultra-rapid chargers are often found at motorway service stations.

How far can an electric car go on one charge?

It’s estimated that a fully charged electric vehicle can travel 100-300 miles before needing to be charged again. However, similar to a mobile phone, EV owners will often top up their charge rather than running it from full charge to nothing.

EV charging points in the UK

Over the past few years, there has been a significant increase in public electric vehicle charging stations. At the end of July 2022, there has been a recorded over 33,000 charging points across the UK according to Zap Map.

How much does it cost to charge an electric car?

The cost of charging your electric vehicle depends on which charging point you’re using. Public electric charging points are usually free to use, as well as at businesses where employers install workplace chargers.

For rapid charging points, these usually require a fee at motorway services. Typically, this will cost £11 for a 30 minute, 90 mile charge. Read more about the cost of EV charging.

How do you pay for electric car charging?

The majority of EV charging stations will accept card payments. Some might require you to download an app to pay.

If you manage a fleet, you may be concerned about how to manage the costs of EV charging. It is still possible to use fuel cards to pay to charge electric vehicles. For example, the Shell EV Card can help you save 2p per kWh which you can access at over 7500 EV charging points across the UK. Not only this, with the same card you can access over 3,800 stations for traditional fuel too if you’re operating a mixed fleet.

If you’re concerned about transitioning your fleet to an electric, or semi-electric model, get in touch with our experts to learn more about how we can support you with the right charge cards and technology.

Do electric cars pay the congestion charge?

Another benefit of going electric is that all EVs are exempt from the London Congestion Charge and the Ultra-Low Emission Zone charge.

Government grants for electric car charging points

Having an EV charging point installed at your business is not only positive for the environment, but it’s an additional perk for employees. For businesses with an EV fleet, it may be beneficial to invest in charging points to charge vehicles overnight before shifts begin in the morning.

The Workplace Charging Scheme offers a government funded grant which covers up to 75% of the costs of purchasing and installing an EV charge point. This is capped at £350 per socket for up to 40 sockets per applicant. All you need to do is complete the Workplace Charging Scheme application form and, if successful, you’ll be issued a unique voucher to give to ChargePoint installers.

How to charge electric cars at home

For individuals who want to charge their electric vehicle at home, you can have an electric charging port installed at your property. As with workplaces, the government offers the £350 subsidy towards purchasing and installing through the EV ChargePoint grant at domestic properties.

The average cost for the EV charger itself as well as installation is £1,000, or £650 if successful for the government grant. 3kW chargers will be cheaper to install in comparison to 7kW chargers, so it’s important to consider which is the best for you.

It could be a feasible model for some businesses to offset the cost of home EV charging for vehicles that are to conduct business mileage. Government funding to support the installation of charging infrastructure is still accessible in this instance, making it an option that’s worth exploring for businesses.

How to manage EV charging as a UK business

It’s clear that electric vehicles are here to stay and will eventually become the norm as petrol and diesel cars cease to be made after 2030. As a result, it’s time to consider how EVs can be managed by your business through electric fuel cards.

To find out more about electrifying a commercial fleet, you can visit our Electric Vehicle Hub, which will be updated as more EV charging services become available. If you’d like further advice on how Fuel Card Services could help you manage your electrical fleet, get in touch with our expert team today.

Prepaid fuel cards

Prepaid fuel cards explained

Saving on receipts and bothersome admin, fuel cards offer a more efficient way for fleet drivers to pay for fuel. ‘Prepaid fuel card’ is a common name used to describe a standard fuel card, which applies to all of the cards in the Fuel Card Services range.

These types of cards work just like a credit or debit card, and offer a range of benefits for both fleet drivers and managers; simplifying the process of refuelling and increasing the efficiency of fuel repayment.

How do prepaid fuel cards work?

For fleet operators and drivers who are new to fuel cards, there may be some confusion as to what constitutes a ‘prepaid fuel card’. In truth, fuel cards don’t quite operate on a traditional consumer prepayment model whereby you put a specific amount of cash onto a card and spend it at the fuel station.

Instead, all fuel cards in our portfolio get fleet drivers access to discounted fuel costs at the pump. All a driver must do is swipe the fuel card at a petrol station, just as how they would with a debit card, and instead of paying out of their own pocket, they’ll pay out of the business bank account – but with access to heavily discounted, pre-negotiated fuel costs.

Benefits of a prepaid fuel cards

Prepaid fuel cards offer fleets and fleet managers an increased level of control and organisation, making refuelling hassle free and more affordable. Additional benefits include:

Control over funds

Fleet managers can control the amount available on prepaid fuel cards, offering increased control on expenditure and an opportunity to save money.

Additionally, all fuel card expenditure can be tracked via one dashboard, meaning it’s easier to monitor expenditure at scale. This can be crucial when businesses rely on seasonality, and must scale up operations quickly to meet growing demand.

A fixed weekly price

Prepaid fuel cards give users access to fixed weekly fuel prices, often set at a competitive rate.

Efficient administration

Increased control provided by prepaid fuel cards means feet managers can exercise a higher level of control over fuel spending, and a streamlined payment process saves time spent organising receipts and expense repayments.

How are prepaid fuel cards beneficial to fleet drivers?

For fleet operators, prepaid fuel cards offer an opportunity to reduce clutter, both physical and administrational, from the working day. Fleet drivers using a prepaid fuel card no longer need to collect fuel receipts or submit for payback. Instead, by spending within allotted amounts set on prepaid fuel cards, fleet drivers can focus on getting from A to B.

Additionally, there’s a safety benefit to fuel cards. Drivers can avoid carrying cash at petrol stations, and the automated payment process reduces the chance of fraud.

How do I know this week’s fixed price?

Fuel Card Services customers will have the next week’s fixed fuel prices sent to them via email. This means that customers can decide whether it is cost efficient to fill up now or wait until next week.

Why do prepaid fuel card prices change weekly?

Changes to the fixed price each week is reflective of the fluctuations in the international oil market. Prepaid fuel cards offer competitive pricing, meaning you are still likely to save on fuel using a prepaid fuel card than having fleet drivers pay for fuel as a business expense.

Fuel card suppliers

With fuel cards gaining popularity as a means of saving money on fuel and time on administration, as well as offering perks and benefits, more and more suppliers are offering prepaid fuel cards. What this means for fleet management is a vast amount of choice.

With a host of suppliers offering a range of different types of fuel cards, our portfolio comprises some of the largest providers in the UK.

Browse our full range of fuel cards, or get in touch with a member of our team who will find the best card for your business.

Tips for reducing fleet costs

Tips for managing fleet costs

Whenever an entire industry faces significant challenges, it’s often the case that the same number of businesses must now compete for a smaller pool of contracts or customer expenditure. This rings particularly true for the UK’s fleet industry, which in 2022 is:

  • Suffering from a driver shortage.
  • Facing legislative and practical challenges with important and exporting goods.
  • Seeing the highest fuel prices ever recorded in the UK.
  • Looking to tackle uncertainty as customer spending is hindered by a cost of living crisis and rising inflation.

Consequently, it’s absolutely pivotal that SMEs competing within this space do everything possible to tighten up finances and cut back on unnecessary costs.

We’ve produced a complete guide to fleet financing which covers all these elements in depth, however this article will showcase our favourite tips that we feel can help fleet operators become more efficient with expenditure.

1. Use software packages

The fleet industry is built upon technology, with a range of fantastic products entering the market each year. However, telematics is the most fundamental technology package all fleets should be investing in.

An advanced telematics suite can help you track driver mileage, enable maintenance scheduling, automate vehicle safety check recordings, and much more – all through a centralised database that makes reporting on and analysing insights easy and efficient.

If you’re looking to make efficiencies, you won’t get far without first having valuable data to access- so telematics is a crucial starting point that enables cost savings in the long run.

2. Integrate your software packages

Rather than having a set of standalone technologies that require intensive training and separate platforms to operate, it could be worth investing in a technology stack for your fleet business that integrates with one another.

By synchronising your databases, for example linking telematics to your mileage tracking and vehicle insurance software, you could save yourself time that would otherwise be spend traipsing through hefty spreadsheets.

3. Outsource financial management

Adopting a third-party accountancy package could be worth considering for commercial fleets, and there are a range of options in market to suit accountants of all proficiency levels. These could help your business monitor cash flow, and enable you to forecast for the upcoming weeks, months, and years – which could be essential to business planning for those that are looking to electrify their operations.

Some of the key obstacles facing SME fleets in the coming years that may be assisted through refining financial processes include:

  • Keeping competitive on the technology front.
  • Transitioning to electric fleet vehicles.
  • Decarbonising fleet operations and infrastructure.

4. Reduce your fuel costs

Perhaps the most significant expenditure facing any commercial fleet is fuel, which is why it’s imperative that fleets do whatever possible to reduce fuel expenditure.

Driving down fuel costs is most easily achievable through investing in a discount-based solution that drives the cost of fuel down at the petrol pump. A commercial fuel card can enable this saving mechanism, and is a worthy consideration for any businesses with any number of vehicles.

5. Talk to your drivers about fuel efficiency

If you’re looking to see a marked improvement over time in driver-related metrics, then having an open and honest conversation about how efficiencies can be made is likely a good starting point.

For example, your drivers may be interested in learning more about hypermiling and how they could optimise every aspect of their daily driving to minimise fuel usage. Alternatively, you could look to test their knowledge of route planning and the likes in a constructive and friendly way; leaning on their expertise and route knowledge where possible.

Proper car maintenance can also improve fuel efficiency, as tyres that are evenly pumped to a good standard require less fuel than those that have minimal tread or sub-par PSI.

One final tip from the team at Fuel Card Services is to keep an eye on how your main competitors are refining their processes. It’s possible that businesses who are at the cutting edge of technology and quick on the uptake could seize small advantages when it comes to cutting costs – which can have a significant impact over time.

How can Fuel Card Services help?

At Fuel Card Services, we aren’t equipped to solve the global fuel crisis, however we do have many years of expertise in providing UK businesses with our market-leading range of the best commercial fuel cards.

Our suite of cards encompasses all major UK brands, with coverage across the country. Beyond saving up to 10p per litre, you’ll also save a great deal of time with HMRC approved invoices – no more holding on to receipts!

Get in touch with our experts to find out more about fuel cards – the smart way to manage your fuel and fleet costs. Or browse our suite of fleet services – which include advanced telematics systems.