Why Sports Stars are going green with their Electric Car Lease

Electric Car Leasing - Why Sports Stars are going Green with their EV business vehicles

The age of electrification is bringing many diverse businesses and personalities together. In the sporting world, many of our leading athletes now operate limited companies to ensure tax efficiencies and effective wealth management; this is where the move towards BEVs is becoming more noticeable.

Many will also have noticed the recent tie-up of BYD and the Euro 2024 football tournament , with the Chinese electric manufacturer becoming the official partner and “E-Mobility” partner of UEFA. Others will have noticed that BYD already have a sponsorship arrangement with a number of Manchester City footballers like Kyle Walker and Phil Foden now proud owners of the BYD Seal. But will other sporting stars be moving towards electric car leasing?

The starting point is to understand why businesses are moving into an EV, like the upcoming EV3 SUV shown here. If you own and operate a limited company as a sporting star, which many do, then your accountant and tax advisor will work with you to understand how best to make sure that you are operating as tax efficiently as possible.

Even bigger accountancy practices are producing useful guides on what the HMRC expect of you and your corresponding obligations. As part of your analysis, the vehicle(s) you operate through your company will be reviewed.

In particular, the methods of vehicle procurement will also be analysed, as there are a number of products and routes to review - cash purchase, hire purchase, contract purchase, finance lease and contract hire. But what is also fundamental is the actual vehicle being utilised and the type of fuel, as this will determine how HMRC treats the arrangement.

For those limited companies purchasing their new cars, whether cash purchase / hire purchase / contract purchase, they will be looking at capital allowances, which essentially involves writing down the value of the vehicle over a set period of time.

For many low-emission vehicles, which emit less than 51g/km of CO2, the company can write down 18% per year (Main Rate pool). For all other vehicles above 50g/km of CO2, this will be set at 6% (Special Rate Pool). However, because electric cars emit no CO2, they are zero-emission and they benefit from such incredible tax incentives.

A business can write down 100% of the vehicle’s value in year 1 and this will include any interest payable where procured on a finance arrangement. However, ownership products generally commit you to the vehicle and if you do want the ability to control the process and dictate when, and where, you sell your vehicle then this should be your preference. But with EVs experiencing fluctuating residual values, the risk of ownership is being absorbed completely by the business.

For usership products, like contract hire, the business can utilise the vehicle for 2 / 3 / 4 years and return this when the contract has ended.

In addition, many finance companies will offer a service and maintenance contract so that the running costs associated with servicing, tyres, maintenance and breakdown recovery are included too. This creates a situation where you need only insure and charge (fuel) the vehicle.

But the tax treatment of leasing is slightly different to the above. As an operating lease, the monthly rentals you pay will be offset against Corporation Tax.

However, the vehicle emissions will impact what you can reclaim. For example, if your vehicle emits above 50g/km of CO2 only 85% of the rentals can be offset; so in the case of a zero-emission EV this allows 100% of the rentals to be offset. Around 50% of the VAT payable on the rentals can be reclaimed on the monthly rentals for a VAT-registered business (one which turnovers above £90,000). In the case of the maintenance / servicing rentals, you can reclaim 100% of the VAT on this aspect.

And there are some other fantastic tax benefits which EVs enable sporting stars to enjoy (and not just the positive image they create in utilising these vehicles). Any charging sessions undertaken and paid for by the company are not subject to any private fuel, which does apply in the case of any petrol or diesel options.

Charge point infrastructure at your home or office, which the business pays for, is completely tax deductible under the full expensing rules. For the athlete, as an employee of the company, they do not incur any significant tax issues.

When you drive a car provided to you by a company, this is not a totally free arrangement. The employee must account to HMRC for the benefit in accordance with the vehicle’s value (P11d), emissions (to establish BiK %) and the respective income tax threshold of the employee.

The more expensive the vehicle, and more polluting it is, the more company car tax will be. But the zero-emission EV does mean that the tax thresholds are actually relatively nominal and even the most luxurious and performance cars are relatively affordable propositions.

With so many luxury car manufacturers now entering the lithium-ion industry, this is going to bring more personalities and athletes to the electric car lease industry.

We now have confirmations that Ferrari and Range Rover are bringing all-electric options to the UK market for 2025 / 2026, with Lamborghini set to follow shortly thereafter. With brands like Lotus, Maserati, Porsche and even Rolls-Royce already making an array of credible prestige EVs, it is no surprise that so many footballers, golfers and tennis players are enjoying the EV journey!

But another manufacturer aiming to capture your attention for 2024 and beyond is the South Korean powerhouse Kia. Already producing some excellent cars, like the Niro EV, EV6 and EV9, the East-Asian brand will be bringing yet another solution to the UK leasing market - the EV3.

It is now possible for customers to register their interest  for this upcoming EV3 SUV which is self-described as a “Moving Power” and possessing “the power to move millions”. News and media are now just getting their hands on the actual product, with the pros being acceleration, comfort, useful tech and size.

The underlying submission is that it is very much a robust family 4x4 which can deliver a pragmatic electric car experience. The vehicle will feature some nice features with the sliding centre table console, AI-powered in car entertainment, 30” widescreen display, Harman Kardon sound system, Vehicle to Load functionality and Kia Assist.

But how will the new Kia EV3 perform? 

As per below two battery options will be available to the UK customers:

•  EV3 Standard Range - (starting at around £34,000) the 55 kWh lithium-ion battery will offer 0 – 62 times of 7.5 seconds, 106 mph top speeds and 150 kW (or 201 hp). This model is a FWD option. Expect a combined winter range of 170 miles with warmer weather allowing for 230 miles - 200 miles combined. On charging, the 11 kW AC max will allow 6 hour 0 – 100% charging times with the 100 kW DC maximum allowing 32 minute 10 – 80% times. This has a cargo volume of 460L and vehicle fuel equivalent of 147 mpg. The EV3 will feature bidirectional charging - a 3.6kW AC Vehicle-to-Load (V2L). An indoor and outdoor port means you can power external devices too; and

•  EV3 Long Range - (starting at around £40,000) the 78 kWh lithium-ion battery will offer 0 – 62 times of 7.7 seconds, 106 mph top speeds and 150 kW (or 201 hp). This model is a FWD option. Expect a combined winter range of 235 miles with warmer weather allowing for 320 miles - 280 miles combined. On charging, the 11 kW AC max will allow 8 hour and 30 min 0 – 100% charging times with the 135kW DC maximum allowing 33 minute 10 – 80% times. This has a cargo volume of 460L and vehicle fuel equivalent of 145 mpg. The EV3 will feature bidirectional charging - a 3.6kW AC Vehicle-to-Load (V2L). An indoor and outdoor port means you can power external devices too.

Browse our Kia EV3 deals

Need more help and advice on taking your athletics or sporting business electric?

Just get in touch with our team on 01942 910 001 or by emailing us at [email protected]