What are are ULEVs?

What are ULEVs and why should I have one?

With climate change being a hot topic in the news right now and the unification of the world’s nations discussing and agreeing to limit the amount of carbon emissions to combat climate change at COP26, we take a look at ULEVs and why you should have one.

ULEVs explained

An Ultra-Low Emission Vehicle (ULEV) is a low emission car or van that emits 75g/km CO2 or less, based on the NEDC test.

The NEDC test (The New European Driving Cycle) is a driving cycle, designed to assess the emission levels of car engines and fuel economy in passenger cars (which excludes light trucks and commercial vehicles).

Why should I have one?

Pure electric vehicles, and other plug in electric vehicles when driving in the electric mode, produce no tailpipe CO2 or pollution.

Countries are being asked to propose ambitious 2030 emissions reduction targets aimed to hold the increase in global average temperature to below 2°C above pre-industrial levels, ideally limiting the increase to 1.5°C and secure global net zero by 2050.

‘Net zero’ means that any emissions are balanced by absorbing an equivalent amount from the atmosphere. In order to meet the 1.5°C global warming target in the Paris Agreement, global carbon emissions should reach net zero around mid-century. For developed nations such as the UK, the date may need to be earlier.

When we reach net zero when the amount of emissions we add is no more than the amount taken away.

Financial incentives

  • Electricity is not considered to be a combustible fuel, and therefore fuel duty would not be added to electricity consumed to power electric vehicles.
  • As electricity is not a fuel, the car and van fuel benefit charges – for private use fuel provided by employers – will not apply. However, it can apply to plug-in hybrid cars.
  • A UK government plug-in car grant: up to £4,500 for an eligible new electric car (with a zero emission range of over 70 miles); up to £2,500 for an eligible new plug-in hybrid (CO₂ emissions of less than 50g/km and a zero emission range of between 10 and 69 miles, with an ‘on the road’ price of £60,000 or less – or CO₂ emissions of 50 to 75g/km and a zero emission range of at least 20 miles, with an ‘on the road’ price of £60,000 or less); and up to £8,000 for an eligible new electric van.
  • An OLEV home charge point grant: up to £500.
  • The Workplace Charging Scheme also enables any business, charity or public authority to claim a grant of up to £300 per charging socket towards the cost of installing EV charge points.
  • Reduced rates of Vehicle Excise Duty (VED). Pure electric low emission cars (with 0g/km CO2 emissions) pay zero VED; vehicles with 1-50g/km Co2 emissions have a first year VED rate of just £10, and vehicles with 51-75g/km Co2 emissions have a first year VED rate of just £25.
  • All purely electric vehicles are eligible for 100% first year allowances. This means that you buy a £50k electric car and it reduces your profits by £50k in year of purchase. Super tax efficient!

Benefit in Kind (BIK)

When a vehicle is provided for an employee or director by their employer and is available for personal use, the recipient must pay tax on the benefit that they receive from this.

The government has set BIK rates to encourage the choice of vehicle to be one of lower CO2 emissions. An electric vehicle for example, produces no tailpipe CO2 or pollution which means it’s the perfect choice for paying less tax.

BIK rates for cars registered before April 2020

If your vehicle was registered before April 2020 then the table below shows the appropriate rates.

CO2 (g/km) Electric Range (miles) 2019-20 (%) 2020-21 (%) 2021-22 (%) 2022-23 (%)
0 N/A 16 0 1 2
1-50 >130 16 2 2 2
1-50 70-129 16 5 5 5
1-50 40-69 16 8 8 8
1-50 30-39 16 12 12 12
1-50 <30 16 14 14 14
51-54 19 15 15 15
55-59 19 16 16 16
60-64 19 17 17 17
65-69 19 18 18 18
70-74 19 19 19 19
75 19 20 20 20

BIK rates for cars registered after April 2020

CO2 (g/km) Electric Range (miles) 2020-21 (%) 2021-22 (%) 2022-23(%)
0 N/A 0 1 2
1-50 >130 0 1 2
1-50 70-129 3 4 5
1-50 40-69 6 7 8
1-50 30-39 10 11 12
1-50 <30 12 13 14
51-54 13 14 15
55-59 14 15 16
60-64 15 16 17
65-69 16 17 18
70-74 17 18 19
75 18 19 20

Searching for a ULEV

Price continues to be a brake on a rapid uptake to ULEVs, but as demand increases, new developments in the technology of low-carbon transport will evolve and prices will fall.

You can search for vehicles by low emission here.

Summary

Most families have cars, some use commercial vehicles. The majority are presently fuelled by petrol or diesel.

As manufacturers commit investment to the development of carbon-free transport options, primarily the use of electric powered units, these same families will be faced with ever-rising incentives to ditch their petrol or diesel vehicles and join consumers encouraged to buy electric.

Climate change affects everything from geopolitics to economies to migration. It shapes cities, life expectancies and even affects wine lists.

Because it touches everything we do, it has never been so important we take positive steps to help reach net zero.

With so many positive outcomes from switching to ULEV the future is bright. If you need assistance with switching your vehicles to ULEV and benefiting from the best possible tax efficiencies, get in touch.

How We Work

Working with us couldn’t be easier and we make switching simple

Step 1.

Book A FREE Consultation

Contact us to book your FREE initial consultation. We’ll work around times that best suit you.

Step 2.

Initial Discussion

We take the time to get to know you and your business, your challenges and expected outcome.

Step 3.

Recommend Options

We’ll review and present our recommended options in plain english with associated fees.

What’s Included

It’s important you make a good connection with your accountant. Your accountant will become an extension of your business, working with you, for you.

Our initial free consultation allows us to get to know each other and for us to understand your challenges. We’ll also explain how we think we can make a difference. Here’s what you should expect in your initial consultation.

  • Typical consultations take around an hour, so we won’t take up too much of your time.

  • Don’t worry about preparing lots of information for us ahead of the meeting, it is not necessary.

  • If you would like to send us your last return, we’ll happily take a look before we meet.

  • We can meet at your convenience. Out of hours and even weekends, just let us know.

  • There’s no obligation and we will happily answer any questions you may have.

Book a FREE Consultation

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