Time to go electric? (continued)

Electric delivery van with electric vehicles charging station

Vans

Vans are treated as normal plant and machinery, so are eligible for the 100% AIA on purchase. They also have much lower benefit-in-kind charges than most cars where the employee or director has private use, being (for 2023/24):
• Nil for an electric van
• £3,960 for any other van.
If private fuel is paid for by an employer, there is an additional benefit charge of £757. Note that, unlike for a car, travel from home to your normal place of work counts as business rather than private mileage

 

Van or car?

In most cases it will be clear if you have a car or a van, but not always. For benefit purposes, a van is a vehicle of a construction primarily (i.e. first and foremost) suited to the conveyance of goods or burden of any description (but not including people). If a vehicle is not primarily for the conveyance of goods or burden, it will be classified as a car.

Buy or lease?

Whether to buy or lease is obviously a key issue when acquiring business vehicles. The decision will likely be based mainly on the types of deal on offer, but be aware that the tax rules for each option are very different. No capital allowances are available on leased vehicles, but the leasing costs recognised in the profit and loss account under generally accepted accounting practice are deductible for the business, subject to a disallowance of 15% for cars with CO2 emissions above 50g/km.

Don’t rush any decisions in this area and be aware that rules may have changed since your last vehicle purchase. Please contact us if you need any further information but remember, whether you are a director, employee or self-employed, that it is important to keep accurate business mileage records!