What is the plug-in grant?
The plug-in grant has been around for several years as an incentive to purchase electric vehicles to curb climate change. The grant has been modified many times, but it currently offers £2,500 off of eligible low-emission cars and up to £16,000 for larger vehicles.
You do not need to apply for the grant. The car dealer will include the grant in the vehicle’s price if it is eligible.
- Cars: CO2 emissions of less than 50g/km and can travel at least 112km with zero emissions. The car must cost less than £35,000 and be on the list of government approved vehicles. The grant will pay for 35% of the car price up to £2,500.
Grants for vehicle charging points
In addition to the plug-in grant, you can also receive up to £350 towards the cost of a vehicle charging point. The Electric Vehicle Homecharge Scheme (EVHS) provides up to 75% of the installation cost on domestic properties in the UK.
There is also the Workplace Charging Scheme (WCS) which is a voucher based scheme that provides support to businesses who install vehicle charging points.
Both grants need to be applied for from the government’s website.
HMRC Advisory Fuel Rate
The advisory electricity rate for fully electric cars is 4p per mile.
So you can claim 4p per mile for business miles in an electric car.
Advisory fuel rates – GOV.UK (www.gov.uk)
100% Capital Allowances
Businesses of all sizes can claim 100% FYAs on capital expenditure on a car (CA23153) provided that:
- the car is ‘unused and not second hand’, and is first registered on or after 17 April 2002;
- it is an electric car or a car with qualifying CO2 emissions of not more than a specified amount;
- the expenditure is incurred between 17 April 2002 and 31 March 2025; and
- the expenditure is not excluded by the general FYA exclusions, see CA23110.
Second Hand zero emission cars are added to the main rate pool and written down at 18%
Benefit in Kind
Cars first registered from 6 April 2020 (WLTP)
| CO2 emissions figure | Electric range figure | 2020–21 | 2021-22 |
| 0 | N/A | 0% | 1% |
| 1–50 | 130 or more | 0% | 1% |
| 1–50 | 70–129 | 3% | 4% |
| 1–50 | 40–69 | 6% | 7% |
| 1–50 | 30–39 | 10% | 11% |
| 1–50 | Less than 30 | 12% | 13% |
