Considering a switch to an electric vehicle (EV) but worried about costs? You're not alone. Thankfully, various governments and organisations offer grants, incentives, and tax credits to make eco-friendly travel more affordable.
UK Financial Benefits for EVs
In the UK, a range of financial aids are available, from the EV Charger Point Grant to the Workplace Charging Scheme and Plug-In grants. This guide will help you understand all the UK-specific financial benefits of owning an EV.
Electric Vehicle Grants
The UK government encourages green transportation through various grant schemes. There are two notable grants: electric vehicle charge point grant and EV infrastructure grant.
EV Charger Point Grant
This grant, funded by the government, subsidises 75% of the cost to install a smart charging point at your residence. It aims to make EV use more convenient and cost-effective. The grant cap is £350 for installation costs.
Prior to April 1, 2022, a similar scheme known as the EVHS was in operation. Both cover 75% of costs but differ in rules and regulations.
The grant eases the burden of home charging costs, making it quicker and more convenient to charge your car at home. Current or future EV owners with private off-street parking are eligible.
All the landlords, flat owner occupiers and people living in rented properties are eligible for this grant.
EV Infrastructure Grant
An EV infrastructure grant provides financial assistance for the installation of multiple charge point sockets, covering both current and future needs. This includes essential work like wiring and posts. You can receive up to £30,000 or a 75% discount on the overall cost, depending on the number of parking spaces involved. Each financial year, you're eligible for up to 30 such grants, with each grant being applicable for a different property.
To be eligible for an electric vehicle grant in the UK, you must own or manage a residential or commercial property, excluding the Channel Islands and Isle of Man. Residential landlords can apply for multiple types of grants, while commercial landlords are limited to chargepoint grants for staff use only. Your property must have off-street, legally verifiable parking spaces, and your installer will ensure safety compliance.
Workplace Charging Scheme
This scheme is managed by the DVLA and run by the Office of Zero Emission Vehicles (OZEV). It offers businesses, charities, and public sectors vouchers to cover 75% of installation costs, capped at £350 per socket. The voucher must be used within six months.
Company Car Tax
Company car tax applies when a company car is used for personal reasons, including commuting. Fully electric cars attract a much lower Benefit-in-Kind (BIK) tax rate, making them an attractive option for businesses. The BIK tax for full electrical vehicle is 2% and it is expected to change in the subsequent years.
The BIK rate is applied to the car's "P11D value," which includes the list price of the car plus any delivery fee and additional extras, but excludes the car's first-year registration fee and vehicle tax. To calculate your company car tax you can use the following calculator by comcar.
Road Tax Savings
Electric vehicles currently enjoy significant road tax savings. Until 2025, they are subject to a 0% road tax rate. Road tax is usually calculated based on the amount of CO2 emissions a car produces. Since electric cars have zero tailpipe emissions, they are exempt from this tax. However, due to the rising popularity and increase in market share of electric vehicles, the government plans to introduce a road tax for them starting in 2025. In the first year, owners will be required to pay the lowest rate for road tax, also known as Vehicle Excise Duty (VED). This tax will be £10 in the first year and £180 in subsequent years.
The government provides a plug-in grant to encourage the purchase of specific low-emission vehicles. Importantly, standard cars are not eligible for this discount. The grant applies to a range of approved vehicles, including wheelchair-accessible vehicles, mopeds, motorcycles, various types of vans, trucks, and taxis.
One of the key advantages is that you don't need to apply for this grant; the discount is automatically incorporated into the purchase price by the seller. By offering this financial incentive, the UK government aims to make environmentally-friendly transport options more financially accessible. This grant serves as an effective way to transition towards greener modes of transportation.