Ev purchase for a limited company and capital allowance

[mpgrant70]

Hi could any accountant members explain the difference from buying a new ev rather than 2 month old one for example I believe the capital allowance is different the car will be purchased by a limited company and used for personal and business use. Thanks

[williaa68]

I i’m not an accountant but I bought an EV for my use through our business. The EV new qualified for 100% capital allowances. A secondhand one doesn’t. I don’t know why!

[Silverage]

I think it’s just because the govt want to use it as an incentive to get more evs on the road. The used one is already on the road so they’re not interested in that.

[tleefox]

Spoke to our accountant about this last year; new EV’s qualify for the “super deduction” so 130% of list price. However, my accountants advice was not to bother, as a) car prices are so high (partly because of this) at the moment that it is a false economy and b) there are a number of caveats attached to the super deduction which make it a lot less appealing if you don’t hit them all.

I didn’t ask what the capital allowance is against used EV’s or hybrids, but this is probably the route I will go down as opposed to the new route.

[Silverage]

I just got the 100% and it was a no-brainer really. Especially combined with the super low BIK and all the car’s running costs being paid for by the company out of untaxed earnings.

[theboss]

tleefox said:

Spoke to our accountant about this last year; new EV’s qualify for the “super deduction” so 130% of list price. However, my accountants advice was not to bother, as a) car prices are so high (partly because of this) at the moment that it is a false economy and b) there are a number of caveats attached to the super deduction which make it a lot less appealing if you don’t hit them all.

I didn’t ask what the capital allowance is against used EV’s or hybrids, but this is probably the route I will go down as opposed to the new route.

Would very happily stand corrected but I believe your accountant is wrong, EV cars don't qualify for the super deduction, though vans/commercials would.

Edited by theboss on Monday 6th June 14:17

[db10]

ev cars do qualify but only brand new ones as a previous poster has said

First year allowances
If you buy an asset that qualifies for first year allowances you can deduct the full cost from your profits before tax.

You can claim first year allowances in addition to annual investment allowance - they do not count towards your AIA limit.

What qualifies
You can claim ‘enhanced capital allowances’ (a type of first year allowances) for the following equipment, which must be new and unused:

electric cars and cars with zero CO2 emissions
plant and machinery for gas refuelling stations, for example storage tanks, pumps
gas, biogas and hydrogen refuelling equipment
zero-emission goods vehicles
equipment for electric vehicle charging points

[Insurancejon]

db10 said:

ev cars do qualify but only brand new ones as a previous poster has said

First year allowances
If you buy an asset that qualifies for first year allowances you can deduct the full cost from your profits before tax.

You can claim first year allowances in addition to annual investment allowance - they do not count towards your AIA limit.

What qualifies
You can claim ‘enhanced capital allowances’ (a type of first year allowances) for the following equipment, which must be new and unused:

electric cars and cars with zero CO2 emissions
plant and machinery for gas refuelling stations, for example storage tanks, pumps
gas, biogas and hydrogen refuelling equipment
zero-emission goods vehicles
equipment for electric vehicle charging points

Ev cars qualify for the standard 100%

Commercial vehicles get 130% super deduction