Plug-in electric vehicles offer a wider variety of ‘refuelling’ options for drivers, including charging at home, at work and at public charging stations. When reclaiming the cost of charging for business travel, there are some unique tax considerations for fully electric cars. The Advisory Electric Rate (AER) Electricity for a company car is not considered ‘fuel’ and therefore, no fuel benefit charge will arise. HMRC publish advisory rates for businesses to use for the re-imbursement of mileage in company cars. These rates will be used where a company is reimbursing its employees for business travel in company cars but also when employees are required to repay the cost of fuel for private travel (more discussed below). Furt...

Efforts are being made by the Government to motivate businesses to own lower CO2 emission cars in the push to become a greener society. From April 2021, new tax measures - particularly relating to capital allowances - are being introduced to encourage and incentivise businesses to opt for more climate-friendly vehicles. First Year Allowances (FYAs) The Government announced during its last budget in 2020 that FYAs would be restricted to expenditure for new zero emission and new electric cars from 01 April 2021 onwards, with these FYAs being extended until April 2025. These allowances allow the whole of the expenditure incurred by the business to be deducted against trading profits in the period. It is important to note that the FYAs ar...