Why Estate Agents and Property companies are going electric with their company cars

Electric company car - Why Estate agents and Property companies are going the EV route

Electric cars for Europe are getting very interesting this week (10 June 2024). As reported in Reuters  the EU is set to release the tariffs it will impose on Chinese electric vehicles which are making their way into the mainland. Brands like BYD, Geely and even Tesla are set to be subjected to new tariffs.

Over the last few months, it has been well reported that many European car makers have expressed their unhappiness about the competition from China and the impact on their own electric car ambitions. Some MDs, like Renault and Stellantis, have made public warnings that unless this is addressed, the future of EV production for their brands could be in jeopardy.

On the surface it would appear that Europe stands on a precipice for success or failure. But they are not on their own, with the US already confirming an increase in import tariffs from 25% to 100% for EVs, with the Biden administration looking to push more customers towards home-built all electric product. For Europe, it is unlikely that tariffs will be so punitive but any measures will have significant impact.

Some Chinese brands are already working collaboratively with some European brands. The deadline for provisional measures is 4 July 2024, so expect to see some movement in this area.

What is the situation for electric car demand in the UK?

However, the appetite in the UK’s economy is still robust when it comes to electric vehicles. This is none more so apparent in the company car and fleet market, where the growth is largely being driven. As per the SMMT the BEV (battery electric vehicle) aspect now represents 17.6% of the market, with much of this accounted for with  fleet and business customers (who enjoy the tax advantages).

Only the retail and consumer markets are moving slower with manufacturers having to subsidise and promote their product in order to get more personal contract hire and contract purchase into EVs.

The estate agency and property sectors are probably more than well versed in the nuances of leasing company cars, with many medium to large property companies likely to already have a substantial number of cars for senior management, in addition to company car and salary sacrifice schemes for employees.

For busy town and city centre estate agents / property management companies, having smaller vehicles for organising viewings has been somewhat essential. With major urban areas like Manchester, Liverpool, Birmingham and London now focusing commuters and businesses on emissions reduction, what types of vehicles are operated, is now a key notion.

Electric Car taxation within an Estate Agency or Property Company 

For a limited company, using contract hire and leasing has been a great finance product for the last 20 - 25 years in the UK. A usership relationship, where the company essentially “uses” the vehicle for 2, 3 or 4 years based on a fixed annual mileage and initial rental / deposit, this is a sensible and practical method for a business to manage a fleet more accurately and cost effectively.

The 2019 changes to the electric car tax regime have only bolstered this further, with HMRC allowing some great tax arrangements for the business and driver; there are employer v employee considerations with any car arrangement. For Managing and Finance directors in estate agencies, there are some key aspects to note on the tax, cash-flow and practical side of things:

•  100% of the monthly rentals are allowable against Corporation tax (as the vehicle emits below 51g/km of CO2);
•  Up to 50% of the Vat on the finance rental and 100% of the Vat on the maintenance rental can be reclaimed (or 100% on both rentals for any pool cars);
•  With contract hire, no deposit is required and a company may simply opt for a 1/S initial rental, which is equivalent to a no-deposit commitment with any fleet addition;
•  Contract hire arrangements can include maintenance to cover all aspects of service, maintenance, tyres, breakdown and MOT - this means fleet management is restricted to minor aspects like fuel / charging arrangements, motor insurance and windscreen covers;
•  Charge points at home, or the office, are allowable against Corporation Tax under full expensing / Capital Allowances; and
• Electricity is not considered as private fuel for tax. For petrol and diesel, there is a £27,800 taxable benefit for company fuel / fuel cards. No such charge exists for EV charging.

Electric Car taxation for an Estate Agency company driver/employee

And for any employee / company car driver there is a significant benefit in using zero-emission technology. Using a fleet vehicle is not a free benefit and what car you drive will impact your personal tax exposure. So when you join a property company and you are offered a “free” car with the job, there needs to be an analysis of this. In essence, the UK’s tax regime will review key three aspects, including:

1.  The Value of the car - this is known as the P11d and is based on the list price, including any options / accessories / VAT / VED and delivery charges (but not the first registration fee);
2.  The Emissions of the vehicle - the Benefit in Kind (BiK) is a percentage applied to the P11d. And this is calculated in accordance with the car’s emissions. In brief, the more polluting a vehicle is, the higher the percentage will be (and therefore higher the tax);
3.  Income Tax - the driver’s income tax threshold - 20% / 40% / 45% - is also applied to the above. Again, the higher the income tax rate, the higher the company car tax will be.

Where electric cars are helping so many estate agents is with their zero-emission status. Because they emit 0g/km of CO2 from the tailpipe, the BiK is relatively nominal. This is currently 2% for 2024 / 2025, with this only rising by 1% year on year for the foreseeable.

When this comes down to numbers, you will note that EVs are providing company car liabilities of £25 - £75 per month to the driver compared to the £300 - £500 that many traditional car options would offer. And that is without taking into account the tax on private fuel, cheaper running costs of an EV and the protection against emission zone charging in major towns and cities.

And for senior management, business property owners, there are a swathe of practical family EVs which they can enjoy. One of the newest (and best-looking) estate options is now available to lease - the  BMW I5 Touring 250kW eDrive40 M Sport Pro 84kWh 4dr Auto  One of these beautiful options is pictured here, the  and this is based on the following configuration:

•  Tanzanite Blue Metallic Paint;
•  Perforated and Quilted Veganza leather - Black;
•  20" M light star spoke bicolour jet black alloy wheels - Style 938 M; and
•  Dark silver M accent combined with Aluminium Rhombicle.

BMW I5 Touring 250kW eDrive40 M Sport Pro 84kWh 4dr Auto

The key options on this luxury estate option include Harman/Kardon surround sound, M Sport brakes, individual high-gloss shadow line, M sport suspension, BMW Iconic Glow, lumbar support, heated front seats, eDrive Exterior sound, parking assistant, adaptive LED headlights, Connected Package Professional, wireless charging and Driving Assistant Plus.     

But how does the i5 eDrive 40 Tourer perform?

The 81.2 kWh lithium-ion battery will offer 0 – 62 times of 6.1 seconds, 120 mph top speeds and 250 kW (or 335 hp). This model is a RWD option. Expect a combined winter range of 235 miles with warmer weather allowing for 325 miles - combined range of 285 miles.

On charging, the 11 kW AC max will allow 8 hour and 45 min 0 – 100% charging times with the 206 kW DC maximum allowing 26 minute 10 – 80% times. As an executive estate, this has a favourable cargo volume of 570L and vehicle fuel equivalent of 142 mpg. This i5 can tow 1500 kg braked and 750 kg unbraked. A heat pump is standard. No Bidirectional charging has yet been confirmed.

Want to know more about our BMW i5 Estate EV deals?

Just head to the  BMW  manufacturer website to create your perfect configuration or just get in touch with our team on 01942 910 001 or by emailing us at [email protected] Just let us know the details of your estate agents / property business, so we can offer tailored support and advice.

Browse our BMW I5 electric car lease deals