With all the hype in the press this week about the UK’s commitment to become net CO2 neutral by 2050 I have started thinking forward to how the future will look and what I can do as an individual to contribute towards the nations goal. A great opportunity is presented by the launch of the Tesla Model 3 which will be available from 1st July 2019 onwards. It combines reasonable price with great range and fantastic performance.
Tesla Model 3
The range of the new Model 3 is 329 miles and there is already talk of a 400 mile range version by 2020, the Model 3’s speed is amazing with a top speed of 162mph and an amazing 0-60 time of 3.2seconds for the performance model.
Benefit in Kind and electric cars from 2020/21
Also the Government has made a very helpful change to the Benefit in Kind rules so from 2020/21 tax year the BIK on a Tesla is only 2%. Based on a list price of £48.590 for the top end model that with a few extras, this all points to a likely tax charge of around £1,000 or £200 at 20% and £400 at 40%. This is a fanastic opportunity for the tax conscious amongst us, as you not only get tax relief for the purchase price of the car with capital allowances claimed by your employer or business, but insurance, servicing and electric usage can all be claimed through your business as well. There is no fuel benefit as electricity is not classed as a road fuel!
Therefore this is a great opportunity not to be missed to shift personal expenses into your business, gain tax relief for the purchase of a personal car and to help the environment all at the same time.
I can see that sales of the Test Model 3 in the UK will go well and business users will find this option very popular particular as at the current time it is so attractive from a personal tax benefit in kind point of view.
Driving a lot of miles
The fact that I drive a lot of miles each week as a Portfolio FD has put me off buying an electric car up and until now, but with the range now increasing to closer to 300 miles per charge and the fact that motorway services increasingly have charging infratstructure in place, this makes the whole option attractive and worthwhile. Few journeys are out of range given that I would normally take a break of 30 minutes anyway with a journey over two hours, and 30 mins is significant as that is enough to charge up for another 170 miles of range.
I am also keen to have a Tesla Powerwall at home together with solar panels so I can move along and help the country become carbon neutral, as can be seen there is nothing more helpful as a tax incentive that appeals to us accountants and gives us that extra nudge we all need to help the environment. The powerwall draws economy 7 electricty at night when it is cheaper and uses it to avoid using peak time electricity which is much more expensive, and if you have solar panels also the energy to at least partially charge you car can be free.