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Mo Tax Expert
Mo Tax Expert, Accountant
Category: Tax
Satisfied Customers: 736
Experience:  Accounting and Tax Expert
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Tax Accountants, I would like to buy an electric car

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Dear Sir/Madam/Tax Accountants,I would like to buy an electric car outright (without having to go through any finance schemes). However, I also receive company car allowance per month. Given the low car tax on electric cars (1-2%), is it possible to claim the cost of the car (when I buy it outright) each month as I receive company car allowance? Can I also back date these costs to when I started receiving car allowance?Note: I am eligible for Self Assessment.Thank you. I look forward to your response.Best Regards, Fawaz

Hi and welcome to JustAnswer. I’m Mo, a Qualified Accountant and Tax Expert. I’m currently reviewing your question and will respond to you shortly.

Thank you for your patience.

Hi Fawaz,

From 6 April 2020, businesses can claim 100% of the cost of an electric vehicle against the profits of the year of purchase and there are no restrictions on the value of the vehicle.

Usually, If you buy an electric car through the business you can offset part of the cost against your corporation tax bill. With most cars this deduction will be applied gradually over time, however with electric cars you can claim the full deduction in the year you buy it.

Are you self-employed or do you own a limited company or are you employed?

Please confirm.

Customer: replied 15 days ago.
Thank you Mo. I am employed.

Thank you for your reply.

Salary sacrifice is better way to deliver a tax-efficient benefit to employees, at little or no cost to a given business. In this case, an EV salary sacrifice scheme allows an employee to pay for an electric car each month using their gross salary, before deductions are made for tax and other contributions.

Customer: replied 15 days ago.
Thank you Mo!

My pleasure.

Thank you for the inquiry. It is my pleasure to assist you today.

Best wishes.

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