EV Benefit in Kind - beyond 2025
Discussion
I’m seriously considering purchasing a Taycan Cross Turismo through my business and running it as a company car.
It would take circa 12-months to arrive, in Q1 2023.
The Bik rate is set until March 2025. Beyond which is the completely unknown, (as far as I am aware anyway).
This “unknown” is just too much of a risk to place an order without clarification.
This policy uncertainty is in my view short sighted and surely must mean people are sat on the fence in limbo.
2025 is not that far off given the current wait times with most manufacturers.
Am I missing something obvious?
Does anyone have any idea on what’s “likely” to happen?
It would take circa 12-months to arrive, in Q1 2023.
The Bik rate is set until March 2025. Beyond which is the completely unknown, (as far as I am aware anyway).
This “unknown” is just too much of a risk to place an order without clarification.
This policy uncertainty is in my view short sighted and surely must mean people are sat on the fence in limbo.
2025 is not that far off given the current wait times with most manufacturers.
Am I missing something obvious?
Does anyone have any idea on what’s “likely” to happen?
Who knows, this is why I've grudgingly gone for a 3 year lease rather than 2 years for my model Y, was expected in June, but could well be autumn now for delivery.
In 3 years time the market will be flooded with 2nd hand EVs, which is exactly what the govt had hoped. Give businesses a bit of a incentive to power the EV revolution, knowing full well Joe Public can't afford a £40k Korean appliance, but in 3 years time when it's now £20k they might.
I'd expect BIK to be at least 5%. Could well have a Labour govt by then, no idea what their policies on BIK are, but I imagine they're more likely to give incentives to the public than businesses.
Go for it, I said to my wife, this year is probably the last year it makes financial sense to swap the NX (paying from post tax salary) to an EV leased through my company.
In 3 years time the market will be flooded with 2nd hand EVs, which is exactly what the govt had hoped. Give businesses a bit of a incentive to power the EV revolution, knowing full well Joe Public can't afford a £40k Korean appliance, but in 3 years time when it's now £20k they might.
I'd expect BIK to be at least 5%. Could well have a Labour govt by then, no idea what their policies on BIK are, but I imagine they're more likely to give incentives to the public than businesses.
Go for it, I said to my wife, this year is probably the last year it makes financial sense to swap the NX (paying from post tax salary) to an EV leased through my company.
Not sure what you feel the risk is TBH? You've got a couple of years at 2% BIK versus 37% BIK on a comparable Panamera etc. so make hay while the sun shines?
I'd suggest it's highly unlikely BIK on the Taycan will jump above 5% for 25-26 as they're only going to be increasing the push for people to get into EV's with 2030 looming.
I'd suggest it's highly unlikely BIK on the Taycan will jump above 5% for 25-26 as they're only going to be increasing the push for people to get into EV's with 2030 looming.
Somewhere between what it is now and 50% 
Whilst they may be pushing EVs, they also need more cash. And I think the number of people who will feel sorry for people worrying about how much a £100k+ EV costs the owner will be near zero
If I were them I would hike BIK and VAT on expensive cars and similar purchases.
It's definitely going to be a chunk higher than 2%, so you need to work out how much you can stomach.
(I think they will ratchet up the costs on numerous things for ltd company owners over the next few years. I'd rather they didn't, but Sunak is devoid of imagination and this group will be seen as fair game IMO).
Whilst they may be pushing EVs, they also need more cash. And I think the number of people who will feel sorry for people worrying about how much a £100k+ EV costs the owner will be near zero
If I were them I would hike BIK and VAT on expensive cars and similar purchases.It's definitely going to be a chunk higher than 2%, so you need to work out how much you can stomach.
(I think they will ratchet up the costs on numerous things for ltd company owners over the next few years. I'd rather they didn't, but Sunak is devoid of imagination and this group will be seen as fair game IMO).
Coley88 said:
Pflanzgarten said:
Presumably if they hike it up you’ll only sell the vehicle to yourself anyway?
That would be the most likely outcome in the event it sky rockets. It just starts to make it look less attractive.
And possibly better to stay as is (owned personally).
It seems a bit daft in not doing something you want for fear of an unknown.
My personally opinion, I think it'll really jump up in 2025 but still be massively more cost effective than running a IC car is now, the numbers of EVs still won't be enough by that point.
If it does and a load of us end up buying our company cars at trade value then we're still going to be quids in. Three years down the line I strongly suspect EVs will have extremely strong second hand residuals and that's before we add in another unknown in the Russia/West war and effects on fuel prices.
Coley88 said:
That would be the most likely outcome in the event it sky rockets.
It just starts to make it look less attractive.
And possibly better to stay as is (owned personally).
Doesn't it depend how your company buys it?It just starts to make it look less attractive.
And possibly better to stay as is (owned personally).
If you buy it outright, you can write it down 100% in the first year.
I believe when you sell it, you then pay CT on the proceeds...so if the values tank because BIK hikes up, it's actually in your favour
(Worth checking with an account rather than someone more fond of man maths though!).Murph7355 said:
Doesn't it depend how your company buys it?
If you buy it outright, you can write it down 100% in the first year.
I believe when you sell it, you then pay CT on the proceeds...so if the values tank because BIK hikes up, it's actually in your favour (Worth checking with an account rather than someone more fond of man maths though!).
Does anyone know how this works? I've just ordered a Taycan Cross Turismo, let's call it a round £100k new. If BIK goes bonkers in 2025 and I want to buy it off the company what do I pay? Say retail it will be worth £75k do I have to pay £75k or can you buy it at a discount due to the inevitable bumps and scrapes? I think you can write any depreciation off as a company loss but have to pay corp tax on what you sell it for.If you buy it outright, you can write it down 100% in the first year.
I believe when you sell it, you then pay CT on the proceeds...so if the values tank because BIK hikes up, it's actually in your favour
(Worth checking with an account rather than someone more fond of man maths though!).Am I in the right area? Don't want to bother the accountant on something that isn't turning up for a year and a hypothetical situation. My google skills just aren't working on these questions.
cb31 said:
Does anyone know how this works? I've just ordered a Taycan Cross Turismo, let's call it a round £100k new. If BIK goes bonkers in 2025 and I want to buy it off the company what do I pay? Say retail it will be worth £75k do I have to pay £75k or can you buy it at a discount due to the inevitable bumps and scrapes? I think you can write any depreciation off as a company loss but have to pay corp tax on what you sell it for.
Am I in the right area? Don't want to bother the accountant on something that isn't turning up for a year and a hypothetical situation. My google skills just aren't working on these questions.
You have to pay market value which is probably whatever WBAC/Cazoo will give you at the time. In your example the company will then have to pay 75% of the corp tax relief back that you claimed when you bought it which is 100% in the first year. If you get the car before Apr next year when corp tax goes up you could potentially end up paying back more than you offset due to very high residual because when you sell you will pay back the corp tax @ 25% rather than 19%.Am I in the right area? Don't want to bother the accountant on something that isn't turning up for a year and a hypothetical situation. My google skills just aren't working on these questions.
I think this is right. Going through a similar process myself. Its a bit of a minefield.
moonigan said:
You have to pay market value which is probably whatever WBAC/Cazoo will give you at the time. In your example the company will then have to pay 75% of the corp tax relief back that you claimed when you bought it which is 100% in the first year. If you get the car before Apr next year when corp tax goes up you could potentially end up paying back more than you offset due to very high residual because when you sell you will pay back the corp tax @ 25% rather than 19%.
I think this is right. Going through a similar process myself. Its a bit of a minefield.
Yes that seems right - though I don’t know if HMRC would insist on some kind of more formal market price guide than what wbac would offer (I am an accountant but not a tax specialist)I think this is right. Going through a similar process myself. Its a bit of a minefield.
Should be easy enough to stress test a big rise in BIK?
To pick a number out of the air, I’d guess BIK will be something like 10% in 2026. But who knows?
I think the 19 To 25% corp tax change is on a sliding scale? It’s not a step jump. So depends on your profit level what percentage you will pay.
To pick a number out of the air, I’d guess BIK will be something like 10% in 2026. But who knows?
I think the 19 To 25% corp tax change is on a sliding scale? It’s not a step jump. So depends on your profit level what percentage you will pay.
Edited by lizardbrain on Friday 22 April 07:53
Legacywr said:
I think they ought to scrap these low tax rates on EV's soon, they doen't need to offer an assentive for people to buy a Taycan.
Not trying to get at you here OP, just think it's an unnessary benefit for the reasonably well off!
It's not exactly low tax though is it? On a £100k Taycan you are giving the government £20k in VAT alone before you get the other taxes. It's just nice to get a "little back" as the type of person that can afford a Taycan would typically pay a more than average amount of tax into the collective pot.Not trying to get at you here OP, just think it's an unnessary benefit for the reasonably well off!
If they make it not worthwhile financially why not just but a secondhand Panamera with a V8 in it, no £20k VAT and no BIK to the gov either, although they might get it back on the petrol
Legacywr said:
Panamera or Taycan? Taycan please
V8 or milk float? V8 please.I'm only choosing a Taycan due to the currently advantageous tax benefits, it's a lovely car but 2.2T and crap range are not exactly perfect. I'd be more than happy with a secondhand nice car claiming 45p/mile but the gov wants more electric so are using tax breaks to push us into it. At the moment it is working but the scales are easily tipped.
cb31 said:
Legacywr said:
Panamera or Taycan? Taycan please
V8 or milk float? V8 please.I'm only choosing a Taycan due to the currently advantageous tax benefits, it's a lovely car but 2.2T and crap range are not exactly perfect. I'd be more than happy with a secondhand nice car claiming 45p/mile but the gov wants more electric so are using tax breaks to push us into it. At the moment it is working but the scales are easily tipped.
Other half did 2000 business miles in March, cost us around £90 in electric and claimed £900 in expenses.
it covers the car lease, electric bill and there's still money left over
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