In light of the company car tax changes (which we will discuss below) we thought that it might be useful, and topical, to discuss electric vans (and why you would lease them!).
In association with TFGM, Greater Manchester Chamber of Commerce and Go Electric we have been attending a number of roadshows across Manchester to provide education, insights and experiences to local businesses and authorities who are looking to manage the transition into alternative fuel vehicles; in particular electric vehicles.
The emphasis recently has very much been on cars, as opposed to vans, due to significant company car tax changes.
However, vans will also be a consideration for many businesses across Manchester as the Clean Air Zone (CAZ) will be put in place.
So why is electrification for vehicles so important? One of the leading motivations in the UK is with company car users (or those using business contract hire). When you have a company car it is not “free”; while the company/employer manages the cost of the vehicle and sometimes the maintenance, insurance and fuel, HMRC need information on this arrangement so that they can ensure you are paying the correct tax on this benefit (hence Benefit in Kind – BiK).
The way in which this is calculated is to take a vehicle’s P11d value, the CO2 per kilometre and also review your income tax level. In short, the more expensive and polluting a car is, the higher the rate of tax you will pay on the vehicle.
Fundamentally, our tax regime is a emissions focused and so the more harmful or polluting a vehicle is, the higher the level of tax will be. The growing rates of BiK has put enormous pressure on company car usage and in many cases has resulted in employees leaving the scheme for a personal car allowance i.e… pursuing personal contact hire.
In light of the government’s call to reduce CO2 (and other harmful gases) by cars, the BVRLA along with other industry figures has pushed the Government to confirm the BiK rates for after tax year 2020/1.
The reason for this is that they wanted those drivers using electric cars to enjoy considerable tax benefits to encourage these vehicles to grow in popularity across the UK and therefore support the reduction of harmful gases.
Manufacturers are having to combat the pressures of WLTP plus RDE, in particular with there being a 4% BiK diesel supplement for non-RDE compliant vehicles. The potential tax payable on certain cars is somewhat alarming and therefore businesses and drivers needed some comfort or incentives to make changes.
The good news is that this has now happened and for those company car users operating an electric car will enjoy 0% BiK in 2020/1, 1% in 2021/22 and 2% in 2022/23. From 2020, operating a purely electric car will result in this being free of tax.
I want to avoid company car tax – how do I do this? Well, quite simply, go electric!
But why are vans going electric? Unlike a company car, a company van is treated much differently under UK tax rules. A company van will include both the traditional van plus a pickup (so long as its payload meets the criteria). The way in which tax is calculated is to take an annual taxable benefit of £3430 (for 2019/20) and a fuel benefit of £655 (for 2019/20) and apply your relevant income tax bracket. For a 20% tax payer this result in £817 per year and for the 40% tax payer this is £1,634. Y
ou might be led to thinking that nothing needs to change with your van but in light of new changes across UK’s cities under the CAZ policies, there maybe be some changes requires.
While each local authority has discretion on their CAZ, many will be using category C which means that LCVs/vans will be affected. From 2023 (or sooner) Greater Manchester will look to place a £7.50 daily charge for non-compliant vehicles being those which are Euro 5 or earlier (i.e. registered pre-2016) or Euro 3 petrol (registered before 2005).
But this is very much the start.
As plans develop, the cities across the UK are likely to follow London and their low emission/ultra-low emission zones which will effectively place such onerous charges on ANY combustion engines, that running an electric vehicle will effectively become mandatory. For businesses across Manchester, making the change to electric vans could not only save them money now (based on a whole of life cost analysis) but could prevent any unnecessary pain moving forwards into the future.
In terms of the van shown here, the Nissan eNV200 ELECTRIC 80kW Acenta Van Auto 40kWh, this is based on the following configuration:
· Solid – White
· Cloth – Black
· 15″ steel wheels
In terms of specification options you have the choice of three options:
· Visia – the key features include a 6.6 kW on-board charger, Nissan Intelligent Key, spare wheel, front power windows, driver airbag and ABS;
· Acenta – they key features includes electric door mirrors, rapid charge capability, battery cooler and heater, cruise control, reversing camera and air conditioning; and
· Tekna – the top of the line model will add auto lights, automatic wipers and navigation as standard.
As standard the Acenta van includes electric windows, Bluetooth, cruise control, dynamic control, EVSE charging cable, rear view camera, electrically adjustable door mirrors, front fog lights, battery cooler and heater, air conditioning, rapid charging, 15” alloys, intelligent key, immobiliser and anti-theft alarm. In terms of the additional specification consider adding heat pack (for heated front seat) or one of the dealer accessories available to modify your van.
On the technical-side please note the 1 speed auto fully electric vehicles offers 109ps, a range of between 125-190 miles (weather and driving style dependent) and charging times of 60 minutes on a rapid charger (using a CHAdeMO connector), 7-8 hours on a home charger or circa 20 hours using a standard domestic plug.
Service intervals on the electric Nissan Van are every 18,000 miles.
So would you select an electric van as your next leasing option? Or do you, or the business, still have concerns?