Why an electric car lease could be perfect for your Physiotherapist business

Physiotherapist businesses - An electric car lease could be perfect for you

Running a limited company can be tough. And there are numerous UK physios serving the UK’s population to help restore movement and function for those impacted with injury and illness.

And while many therapists have left the NHS in full, or part, and set-up a limited company to deliver these services, there are some who are not acutely aware of the benefits of electric cars and how they can improve driver experience and the tax position for their company.

Understandably, with considerations like premises, insurance, staff, website, booking systems, yearly accounts filing and VAT / Corporation Tax obligations, it is easy to bypass the importance of a solid company car and fleet policy. Whether you are a small owner-managed operation, or a bigger franchised Physio, the same facets need to be considered if you are looking to get the best results. Treat your car policy with the same vigour as your patients and you won’t go wrong!

While some NHS staff may have enjoyed the favourable salary sacrifice scheme of the NHS, there are some in the health service who have not experienced nor are they familiar with electric vehicles. To be clear, political and economic motions are well underway for the EV movement.

As at February 2024, nearly 36,000 were registered for this year alone - this means we are tracking at over 200,000 new EVs per year in the UK (see  SMMT  ). And within this demographic, some will be for personal contract hire and purchase customers, some on salary sacrifice schemes but many will be through small limited companies who are now cognisant of the benefits of lithium-tech.

And for many physiotherapists, the nature and type of their business is something which they should consider along with the advice from an accountant and/or tax advisor. Some of this is highlighted within the Chartered Society of Physiotherapy synopsis.

Why is leasing an EV great for a Physio?

Leasing is a great way to enjoy an EV as there are no ownership or usership obligations. Some of the cons of electric cars are the changing technology and residual value fluctuations. The problem with Hire Purchase or Finance Lease products, is that they make the risks transfer to the customer.

If the vehicle is worth less than anticipated, there is no recourse or remedy. The loss or negative equity is for the company to manage. While Hire Purchase and Contract Purchase are more tax expedient, because they allow the company to claim back the cost of the vehicle (and interest payable) in year one under capital allowances, the actual monthly price and risks of ownership can make many small businesses concerned.

There is so much conjecture in the press and media about range anxiety, lack of public chargers, systematic issues and the cost of the tyres, that many in the UK have felt nervousness and trepidation about making the green move. While many of these myths and misnomers are easily overcome with proper education, they are propagated with a ruthless vigour. Indeed, the e-car lease team created the ultimate guide and comparison for EVs in 2024 to help provide all the relevant info to our customers.

What is probably understated is how enjoyable many battery vehicles are to drive. Yes, the allure of petrol and the feedback of the engine can be fascinating but less so is the cost at the petrol station and running costs.

Many new EVs are capable of 200 mile+ real world ranges, can charge at around 150kW DC  and all while achieving 0 - 62 times of under 7 seconds (and sub 4 seconds in many cases!). The investment into these cars, and vans, is clear to see.

The technology the driver enjoys coupled with the robust functionality make the entire experience a pleasant one. When you factor in EV motor insurance specialists and amazing overnight tariffs from some energy companies, you do get the picture that a cheaper motoring experience is possible. Not to mention the reduced servicing and maintenance costs associated with these vehicles.

How does the finance application work with BEV leasing?

Any form of vehicle finance is credit-based and contract hire / leasing solutions are no different. If you are looking to procure a new car on this basis, do ensure that you have filed at least one (and sometimes) two sets of accounts at Companies House.

For smaller lifestyle businesses, where any profit is removed by way of dividend and not retained in the business, the selected finance company we work with may ask for a director’s guarantee. This is a personal undertaking where the director agrees to satisfy the rentals if the company cannot fulfil them.

In every instance, you will be asked to complete a finance proposal, which will ask for key details about the company, the director(s), the bank account and any relevant finance information. The more accurate the information, the increased opportunity we have for a successful application. Again, as a credit broker, the e-car lease team can help pair you with a finance company which not only offers value but which best meets your needs and requirements.

Why lease through the company as opposed to personally?

This suggestion is for those physiotherapists who use a  limited company  to carry out their business. For those who operate as a sole trader or partnership, the taxation rules and significance are slightly different.

For a Ltd Co., in using an operating lease (which contract hire is), the company can offset any initial rentals or monthly rentals against Corporation Tax. This is different to Capital Allowances, which we mentioned earlier in this review. For any VAT registered businesses, you can claim up to 50% against the finance and 100% of any maintenance rentals.

Plus the installation of an EV charger is considered full expensing and is therefore wholly allowable against tax. If you do have a charge point at your premises, which will have a corresponding benefit for your clients and patients, the use of any electricity in your car is not considered as a fuel benefit. With petrol and diesel, you have a personal tax liability on any fuel paid for via the company.

But don’t you pay company car tax? Absolutely, you do. However, the rules pertaining to zero-emitting cars (electric and hydrogen) are far more favourable than how petrol and diesel are treated. In summary, the more expensive and polluting and the higher your income tax level is, the more your company vehicle will cost you personally.

These are referred to as Benefit-in-Kind or BiK for short. The crucial percentage for your tax liability relates to the emission and because of the 0g/km status of a pure electric option, your tax liability is nominal compared to a combustion alternative. When you add up the tax advantages for the company against the tax liability in your personal tax, this still works out considerably better than paying yourself a car allowance to buy or lease an EV.

And one lucky business followed our advice to procure this great family electric MPV vehicle shown - the ID Buzz. While the Buzz is already unique and funky, our BCH customer decided to utilise some graphics and wrapping to make it look even better!

In terms of the car shown, the Volkswagen ID.BUZZ ESTATE 150kW Style Pro 77kWh 5dr Auto (Pure Electric Vehicle), this is based on the following configuration:

• Candy white Solid Paint
•  Styling seat pack with White steering wheel - Miwo - Mistral/X-Blue with X-Blue/Silver
•  Birch dashboard
•  20" Solna black diamond turned surface alloy wheels

This RWD minivan will have a 77 kWh usable battery which will offer 0 – 62 times of 10.2 seconds, 90 mph top speeds and 150 kW (or 201hp). Expect a combined winter range of 180 miles with warmer weather allowing for 240 miles.

On charging, the 11 kW AC max will allow 8 hour and 15 minute 0 – 100% charging times with the 175 kW DC maximum allowing 30 minute 10 – 80% times. A cargo volume of 1121L is available with this car. It has a vehicle fuel equivalent of 110 mpg. The ID Buzz can tow 750kg (Unbraked) or 1000kg (Braked). This has no Bidirectional charging and no heat pump

For more information on our best ID.Buzz leasing deals head to:-