As the director of Shinerocks Estate Agents, my car isn't just a mode of transport. It's a mobile office, a meeting space for clients, and, most importantly, a comfortable ride for my Old English Sheepdog, Leon! For years, our diesel estate car has served us well, but recently I’ve been pondering a big switch - should I go electric?
At first glance, going electric seems like a great move for the environment and my business, but it's not as simple as "going green." The decision involves weighing up financial incentives, practicalities, and personal comfort. As a business owner, I face a different set of considerations than I would as a private individual. So, I decided to break down the key differences and weigh up my options.
One of the most convincing reasons to go electric as a business owner is the tax incentives. As I dug deeper into the numbers, I found that the UK government offers businesses some fantastic perks for purchasing electric vehicles.
For example, I can claim 100% first-year capital allowances on an electric vehicle, meaning I can deduct the entire cost of the car from my taxable profits in the year of purchase. This could save my estate agency thousands.
For individuals, though, it’s a different story. There are perks like exemption from road tax and potential grants for installing home charging stations, but they don't come close to the generous incentives businesses receive. This raises a crucial question - is it worth it for an individual buyer to switch to electric without the same tax breaks?
According to Daniel Leapman, Client Manager and Digital Transformation Advisor at Acuity Professional, businesses stand to gain significantly more than individual buyers. Daniel says: “As long as the electric car is purchased brand new, a company can claim a full deduction of the cost against profits via capital allowances.” He also highlights the Benefit-in-Kind (BIK) tax for electric vehicles, which is as low as 2-3%, compared to up to 37% for petrol or diesel cars.
For my business, these savings make a compelling case. But if I were buying purely for personal use, the equation would change drastically.
Beyond tax breaks, I must also consider insurance and servicing costs. Historically, electric vehicles have been more expensive to insure due to the high cost of repairing electric components, especially the battery. However, as more electric vehicles hit the market, this gap is expected to close.
When it comes to servicing, electric cars take the lead. With fewer moving parts, no need for oil changes, and no exhaust systems, there are simply fewer things that can go wrong. So, for a busy estate agent managing multiple properties and clients, fewer trips to the garage means less hassle and reduced downtime. That’s a significant win for Shinerocks Estate Agents.
That said, one lingering concern is battery life. Many electric vehicle batteries come with an 8-year warranty, but replacing them can be costly - sometimes upwards of £15,000 according to BBC’s Top Gear. While battery technology is improving and batteries are lasting longer, it’s still something business owners and individuals alike need to factor into their decision-making.
For businesses, these maintenance costs may be easier to absorb, but they could be a more significant burden for individual buyers.
Another point to consider is depreciation. Like many new technologies, electric vehicles have experienced faster depreciation rates than traditional diesel or petrol cars, though this is starting to shift.
For me, as a business owner, the ability to claim capital allowances cushions the blow of depreciation. However, as an individual buyer, this depreciation might feel more painful without the tax incentives to soften the impact.
With the UK government’s commitment to banning new petrol and diesel cars by 2035, the resale value of electric vehicles may improve over time. But as of now, depreciation remains a factor that makes buying electric less appealing for individual buyers than for businesses.
One of the biggest concerns when switching to electric is the availability and convenience of charging stations. For Shinerocks Estate Agents, the Workplace Charging Scheme offers grants to help install charging stations at the office, allowing me and my team to conveniently charge during the workday. On top of that, we can reclaim VAT on electricity used to charge the vehicle if it's for business purposes.
As an individual, though, it’s more complicated. Home chargers add to your electricity bill, and while it’s still cheaper than filling up with diesel, the installation of a charging station can be pricey. Moreover, if you can’t install a charger at home, finding public charging stations can be inconvenient, depending on where you live or work.
Daniel Leapman notes, “For businesses, the running costs of electric vehicles are generally lower, especially with government schemes and the ability to reclaim VAT on business-related charges”.
And now, for the most important factor in my decision - boot space for Leon. My 42kg Old English Sheepdog is a regular passenger in our car as we travel between property viewings and valuations. Any electric vehicle I choose must have enough space for him to stretch out comfortably.
Fortunately, many EVs, like the Tesla Model X and Hyundai Ioniq 5, come with generous boot space. But this is something I’ll need to test out personally before making any decisions. If Leon doesn’t approve, the deal’s off!
After weighing up all the pros and cons, it’s clear that for Shinerocks Estate Agents, switching to an electric vehicle could make financial sense. The tax incentives, lower running costs, and increasing infrastructure for charging stations are all appealing. Plus, reducing our carbon footprint is a responsibility I take seriously as a business owner.
For individual buyers, though, the decision might not be as straightforward. Without the same tax advantages and incentives, the upfront cost of going electric can be harder to justify. But with the electric vehicle market growing and more government incentives on the horizon, the gap is closing.
For now, I’ll continue my research and take a few test drives. If Leon approves of the boot space, we just might make the switch to electric!
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