Q&A: Claim 100% first year allowance on an electric car
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Q. My company is buying an electric car for me to use for business and private journeys. In truth there will be very few business journeys. Can the company still claim the 100% first year allowance, although the business use will be small?
A. Your company can claim the 100% first year allowance if the car is acquired brand new and not second hand. It is irrelevant that you use the car mainly for private journeys, as you will be taxed on that benefit calculated at 2% of the list price of the car each year. This taxable benefit will increase in just over 2 years’ time, on 6 April 2025, to 3% of the list price.
About the Author
Martin Johnson
Partner
With expertise in advising family-owned companies on a range of tax, accountancy and business issues, Martin also has an in-depth knowledge of the automotive and property sectors. In addition, he provides advice on inheritance tax planning and financial management to owner-managed businesses.
Martin leads the firm in developing its expertise in the buy-to-let sector, advising both residential and commercial property owners on relevant tax and legislation issues.
A further element to Martin’s role is to build Torgersens’ relationships with banks, financial advisors and specialists in commercial and employment law to ensure that the firm’s clients have access to market-leading guidance.
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