How much does it cost to charge an electric car?

Full electric cars are exempt from Vehicle Excise Duty (VED), but you still have to pay Benefit-in-Kind (BiK) tax if you’re going to run one as a company car.

However, for the 2020/21 financial year, the BiK rate for zero-emissions company cars was set at 0 per cent by the government, so there’s nothing to pay until April 2021, at which point it goes up to just 1 per cent, so your bills will still be tiny.

How does company-car tax work on electric vehicles?

There are two parts to company-car tax – what the company pays and what the employee pays – and the amounts depend on the car’s value, its CO2 emissions and the income-tax bracket of the employee.

The amount the company has to pay is determined by the car’s ‘P11D’ value (the value of the car including VAT, options and the delivery fee) and its CO2 emissions.

By contrast, the amount that the employee has to pay is slightly more complicated, and is calculated using the following formula: (P11D value) x (BiK band) x (tax bracket).

For example, a Nissan Leaf 40kWh in Acenta trim has a P11D value of £29,790 and its BiK band for 2021/22 is 1 per cent. So, if you’re a 20 per cent taxpayer, you’ll pay £59.58 in BiK tax, whereas a 40 per cent earner will pay £119.16 in the same period.

Will the BiK rate for fully electric cars change?

As you saw above, the key to BiK tax is the BiK band. The government sets this, and it is 0 per cent for all fully electric cars in the 2020/21 tax year.