Why farmers and agriculture businesses should be leasing an electric car

Why electric car leasing is best for farmers and agricultural businesses

For companies which operate in agriculture - farming, cultivation, horticulture - to name but a few, there is now a real opportunity to enjoy green benefits outside of the land you work and operate from.

We admit, many of the vehicles which are present in these more rural activities are often more rustic by choice, with pickups and Land Rover Defenders more common than pure electric vehicles. Indeed, one of the major farming unions, the  NFU, has a litany of credible vehicle offers and options for the British farming community. And while the focus is very much diesel in this industry, the move towards all-electric isn’t just happening for cars.

Commercial and more industry-focused transport is starting to progress towards the electric sphere. Take examples like Alkè  who are introducing electric utility vehicles for the farming community. These eco-friendly, yet farming specialised units, are very much a zero-emission ATX and which are designed with hard work and pliability in mind.

Even vineyards, wineries and fruit growers are turning towards eco vehicle options, like the Zallys products which have wheelbarrow, conveyor, trolley and picking machinery in all-electric format. And at a time when many large land owners in this sector are turning towards alternative sources of income, such as  solar farms  or battery storage or wind farms , the opportunity may also be in being able to fuel your key plant and machinery, including your fleet vehicles, as part of this arrangement.

With more electric vans and pickups now available to lease (see our EV Van deals ), this is a broadening horizon for many agriculture businesses to operate in a more environmentally friendly and cheaper way.

For farmers and agricultural businesses consider the corporation tax you pay

But adding electric cars to your business may also be a consideration. And by this, we do mean actual cars as opposed to vehicles which work in the business alongside you! Many business owners with a limited company are awakening to the benefits of zero emission vehicles, which are making the cost of fleet operations more cost-effective for the owner and the driver.

In cases of those who buy their business vehicles, whether hire purchase or contract purchase, there is a sizeable 100% first year allowance for a vehicle with 0g/km for CO2. This means that you claim back the full cost of the vehicle (including any interest) against your Corporation Tax.

For cash-rich and highly profitable institutions, the impending 25% main rate for the tax year making companies think more carefully about their spending habits and investments. While the clear pros about purchase style finance is the immediate tax relief, the ownership and obligation towards the EV is less digestible. Some companies are not immune to the changing technology and residual values on EVs and are less welcoming about taking on this responsibility.

Contract hire, or leasing, is a route which many companies are pursuing in order to offset any ownership risks. With a lease, you operate the EV for a predetermined amount of time - 2, 3 or 4 years - using a set annual mileage and initial rental.

Unlike capital allowances, the contract hire option allows the business to offset the initial rental and the following monthly rentals against Corporation Tax. In addition, for a VAT registered company you can reclaim up to 50% of the VAT on the finance aspect and 100% of the maintenance element of the lease.

If you do have a solar or wind farm within your agricultural operation, you can use that electricity to fuel your vehicles. But for any charge points which you install on site, or at the employee’s address, you can claim back the cost under full expensing.

Should you pay for electricity on the EV, or you allow the employee to reclaim the costs, the private fuel for company cars does not apply. This means that an employee can effectively enjoy free fuel, unlike the case with petrol / diesel cars.

While many staff on-site might not utilise a car, if you have any senior management or outbound sales people, the use of an EV will employ these incredible tax benefits. But for the actual driver, there is further good news which needs highlighting.

Using a company car is not free and while the company may pay for the car / maintenance / insurance / fuel, the actual employee must account for this to HMRC. The way this is achieved, is by utilising the vehicle value (P11d), plus any options or accessories, and applying a percentage based on the employee’s tax bracket (i.e. 20 or 40%) and a BiK rate which is calculated on the basis of the vehicle’s emissions.

Because an electric car emits 0g/km of CO2 the BiK on there is just 2%. In reality, this means company car tax exposure of £15 - £50 per month. This is in stark contrast to a petrol or diesel option, which will often be hundreds of pounds per month in comparison.

An insight into the new BMW i5 EV lease deal - ideal car for farmers?

While arguments against going electric has been vehicle quality and ability, examples like the one shown - the BMW i5 lease - do prove otherwise. This 81.2 kWh lithium-ion battery will offer 0 – 62 times of 6.0 seconds, 120 mph top speeds and 250 kW (or 335 hp).

This model is a RWD option. Expect a combined winter range of 245 miles with warmer weather allowing for 335 miles - 290 miles combined. On charging, the 11 kW AC max will allow 8 hour and 45 min 0 – 100% charging times with the 205 kW DC maximum allowing 26 minute 10 – 80% times. This has a cargo volume of 490L and vehicle fuel equivalent of 145 mpg. This i5 can tow 1500 kg braked and 750 kg unbraked. A heat pump is standard. The BMW i5 has no bidirectional charging.

Starting from £67,695 for the Sport Edition and £74,105 for the M Sport saloon, this executive BEV has proved to be popular with the UK’s leasing demographic. Many are going for the M sport (with 19” alloys, Alcantara upholstery, M sport suspension, LED headlights, 8.5” screen with navigation, sport seats, reversing assistant and camera and wireless charging bay) . But there are also a whole host of packs including:

• Technology Pack - BMW Natural Interaction, interior camera and Cockpit Pro with HUD;
•  Technology Plus Pack - adds driving assistant professional and interior camera;
•  Comfort  Pack - Comfort Access, electric bootlid, travel system and heated steering wheel; and
• Comfort Plus Pack - 4-zone air conditioning, comfort seats, ventilated seats and heated rear seats. 

In terms of the car shown, the BMW I5 SALOON 250kW eDrive40 M Sport Pro 84kWh 4dr Auto (Pure Electric Vehicle), this is based on the flowing configuration:

•  Black Sapphire Metallic Paint
•  M Alcantara and Veganza leather – Black
•  Dark silver M accent combined with Aluminium Rhombicle
• 20" M light star spoke bicolour jet black alloy wheels - Style 938 M
• Sun protection glass

Just head to our latest deals at:-

Browse our BMW i5 deals

or for more help or advice, don’t forget to call our expert term at e-car lease on 01942 910 001 or email at [email protected]k.