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The move to electric cars in the company car and fleet market has very much been a “pull” approach, with numerous incentives and benefits to the employer and employee for doing so. However, the new Labour Government may have instigated a “push” approach to EV’s following the Autumn budget.
Described as a “stealth tax” HMRC will be treating a pick-up truck as a car for tax treatment, with any vehicle possessing a payload of a tonne (or more) to be subjected to these new rules. While the Conservative Government did try to make this change, the considerable kick-back and business pressure actually led to a U-turn on the decision and it was considered that they would remain as a Commercial Vehicle.
The importance of treating the pick-up as a commercial vehicle was that a business could claim 100% of the rental against Corporation Tax and 100% of the VAT on these rentals, so long as there was no personal use. In addition, for any purchases, businesses could use their Annual Investment Allowance to write down 100% of the value in year one.
For the driver of the vehicle, the rate of company van / commercial vehicle taxation is much lower than on a passenger car. But from 1 April 2025, the rules for a car will apply to double-cabs for Corporation Tax and from 6 April 2025, they will apply for income tax.
However, those companies who have already committed to a truck before April 2025 will enjoy the existing capital allowances and for any purchase or lease, the existing rules will apply until 5 April 2029. However, from next year the market for pick-up leasing will alter dramatically, with some businesses more likely to move towards electric vehicles to enjoy the employer / employee benefits.
All-electric cars, like the new Mini Aceman SUV, are so popular in the business market because they are zero-emission from the tailpipe. For the employer this means that 100% of the lease rental can be offset against Corporation Tax and up to 50% of the VAT.
For purchases, like hire purchase or contract purchase products, the company can enjoy a 100% Write Down Allowance, which means that the total cost of the vehicle (including any interest) can be offset from the profit subject to tax. Add to that any charge point infrastructure at the business premises or driver’s residence, which can also be offset against tax.
Since electricity is not considered as fuel, HMRC will not apply the punitive measures to the drivers as it would do with petrol or diesel. For company pick-up drivers moving into an Aceman, they will enjoy the preferable BiK position because of the zero-emission.
In the UK, company car drivers are taxed on their vehicles; this is not a “free” benefit. The more expensive your car (under the P11d) and the more polluting it is (on the basis on the CO2 shown as g/km), the higher your tax bill will be. But EVs will remain tax efficient for an employee with the BiK set at 2% for 2024/25, increasing only by 1% each year thereafter. For the driver/employee, this means very little monthly income tax will be deducted, whether you be a 20 or 40% tax payer.
So will cars like the new Mini Aceman, with its tagline “Attention Please”, be the perfect replacement for your old double-cab? Luxurious, versatile and edgy, this new option is aiming to provide the UK leasing market with a modern vehicle and one which adds a little more carrying capacity than the Mini Hatchback. The specifications will include:
The key colours of the Aceman include British Racing Green, Rebel Red, Nanuq White, Indigo Sunset and Midnight Black. In terms of options, add the Level 1 for adaptive LED headlights, comfort access, folding mirrors auto-dimming, heated front seats, high beam assist, HUD, rear mirror auto-dimming and wireless charging.
The Level 2 option pack will include all of the Level 1 plus the Harman/Kardon sound audio, panoramic glass sunroof and sun protection glass. The Level 3 allows for Active Driver seat, electric memory seats, driving assistant plus, navigation AR, interior camera and parking assistant plus.
Three key battery options can be selected including:
Build your preferred option of Aceman on the MINI website or Just get in touch with our team on 01942 910 001 or by emailing us at [email protected]
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