More company car fleets go electric

Unprecedented demand is being seen by Azets, the UK’s largest regional accountancy firm and business advisor to small and medium-sized businesses.

It has launched a partnership with Total Motion, a major UK fleet management and leasing provider which offers salary sacrifice car schemes via trading company Pink Salary Exchange.

Azets has offices in Stourbridge, Walsall, Wolverhampton, Oswestry, Telford, Shrewsbury, . James Wheeler, director of global mobility at Azets, provides advice to employers looking to move away from diesel and petrol towards a green fleet, including plug-ins.

He said: “The UK’s net-zero carbon strategy is rightly focusing minds in a way we’ve never witnessed before and this is showing through increased demand for electric battery company cars. We are inundated with requests from companies keen to reward staff with a government-approved tax ‘benefit in kind’ through zero carbon or low carbon emission vehicles.

“Around 90 per cent of our advisory work on company cars used to involve internal combustion engines, with the remaining 10 per cent covering electric – now the position seems to have reversed.

“The trend is toward a very strong focus on electric vehicles as part of the overall employee reward package. This seems to be the trend across the UK. Not only that, employers feel it is the right thing to do for the environment as we move away from polluting fossil fuels. And companies are looking to pre-empt any bans on diesel and petrol vehicles in certain locations.”

“It is perhaps only a matter of time before diesel and petrol cars are prohibited from travelling in ‘smog cities’ and it is worth bearing in mind that the Government has announced new proposals which would see more than 50 per cent of all new cars sold to be fully electric by 2028, just six years away. One more factor is also driving demand – diesel and petrol costs are at record highs.”

Demand for new electric cars is borne out by industry data – nearly 191,000 were on the roads in 2021, an 11.6 per cent share of the new-car market in the UK.

Mr Wheeler added: “According to industry forecasts, pure-electric cars are poised to make up one in six new cars on the roads this year and this will undoubtedly accelerate as the supply chain improves and the charging infrastructure grows.”

He added: “Where an employee receives a company car by reason of employment, this gives rise to a taxable ‘benefit in kind’, known as BIK. Income tax, payable by the employee, and Class 1A NICs, payable by the employer, are due on the ‘cash equivalent’ of the benefit. But conventionally fuelled vehicles are more expensive for both employee and employer – electric vehicles, and to a lesser extent, hybrid vehicles, provide significant advantages in this regard.” An illustrative example is included below.”