Buying an Electric Vehicle through your company

A recent survey found that more than 40% of consumers that will buy a car  in the next 12 months will buy an Electric Vehicle.

So what are the tax implications of buying an EV through your Company. The first thing to note is that an electric vehicle derives its motive power only from an electric motor. Hybrid vehicles are not electric vehicles                                                                                                             

Benefit in  Kind [BIK]

Where an EV is first provided to an employee for private use either before the 10th October 2017 or on or after the 10th October 2018, the  BIK position is;

 To get  the partial exemption you reduce the open market value by €50,000 to get the cash amount of the vehicle.


Charging  Equipment   

There is no BIK on an employee or director on charging facilities provided by their employer. This  is on the basis that the equipment is available at any of the  business premises, and it is available to all. If the employer installed charging equipment at the home of an employee there would be BIK for him/her.
For capital allowances purposes the employer can write off the cost of the new EV, up to an amount of €24,000. Under the accelerated capital allowances scheme, the write-off can be €24,000 in year 1.     

To Lease or Buy

Should you lease a vehicle, the lease costs will be written off over the term of the lease whereas if you purchase outright it will be written off as above.

The €24,000 limit still applies. In the case of Electrical Vehicle, it may be more efficient to purchase outright or through a normal loan