When it comes to climate change, we’ve all heard how our actions are contributing to the change in global temperature. While some believe this is a result of industrialisation others say it is a mere blip on the earth’s vast timeframe. No matter where you are in the world or what your belief, you’ve probably experienced some degree of change in the climate this year. From heatwaves across Europe to heavy rains, typhoons and flash flooding in Asia, this year has been quite extraordinary.
Now how does this relate to the company car? If you are of the school of thought that industrialisation is acting as the catalyst to accelerate climate change then the car is definitely a part of this catalyst.
To combat the environmental impacts of driving, the car manufacturing industry has spent millions on research and development programs to make cars more eco-friendly. The result? We’ve seen a surge in affordable and luxury electric and hybrid cars on the market in the last five years. Lately, some vehicle manufacturers have been in the news for falsifying emissions testing results, however, the new breed of cars is certainly better than what we’ve been driving. The new vehicles require little or no fuel and emit less pollutants. With diesel cars being phased out, our reliance on petrol will start to reduce as we move to more eco-friendly cars.
Whilst electric cars for personal use is on the rise, a number of organisations are opting for a fleet of electric vans. Electric company cars are also gradually gaining popularity in the private sector. For most employees, the main reasons for switching to electric cars is to save on the ever rising cost of fuel and minimising one’s environmental impacts. Employees using company cars also see a slight financial gain which simultaneously benefits the company. I am not an accountant by any means, but I am aware that one of the criteria for tax on vehicles is based on CO2 emissions. As most electric vehicles have low emissions, this reduces the benefit in kind amount for the employee and also class 1a national insurance for the company. So this year, my husband and I both decided to opt for a more eco-friendly car. He opted for the Mitsubishi Outlander Phev, I went for the Hyundai Ioniq.
If you are planning to change your company car anytime soon, why not look into the benefits of an electric or hybrid – saving yourself some money and benefitting the environment? You could see a potential saving of £500 to £1500 per annum. This of course will depend on the car you choose. It’s always worth speaking to an expert in the field, such as an accountant, to gain more information on how the switch could benefit you and the company.