Benefits

 

Electric Vehicle Benefits

Individual

What you get

The UK government provides you with various grants to help you switch to an electric vehicle and make a difference to the environment.

Government Grants

The UK government offers grants to support the wider use of electric and hybrid vehicles via the Office of Low Emission Vehicles (OLEV). The amount of the grant depends on the category of the vehicle (cars, vans, motorcycles, mopeds, taxis). Not all low-emission vehicles will get a grant. Only vehicles that have been approved by the government are eligible for a grant.

Plug-in vehicle grant scheme: The Plug-in vehicle grant scheme (the PIVG scheme) is a technology-neutral consumer incentive scheme designed to support the uptake of ultra-low emission vehicles (ULEVs). It was launched in 2011 as part of a package of government measures to achieve the UK’s carbon reduction targets. The PIVG scheme offers grants to reduce the price of ULEVs.

The PIVG scheme offers grants off the price of ULEVs.

Cars - The grant will pay for 35% of the purchase price for these vehicles, up to a maximum of £3,500.

Vans - The grant will pay for 20% of the purchase price for these vehicles, up to a maximum of £8,000. 

Electric Vehicle Homecharge Scheme

 To help private plug-in vehicle owners offset some of the upfront cost of the purchase and installation of a dedicated domestic recharging unit, the Government is running the Electric Vehicle Homecharge Scheme. Customers who are the registered keeper, lessee or have primary use of an eligible electric vehicle may receive up to 75% (capped at £500, inc. VAT) off the total capital costs of the chargepoint and associated installation costs.

 Authorized installers

What you don’t have to pay

UK government does provide various subsidies and exemptions to champions who drive the cause for lowering the emissions.  

Vehicle tax

For the first year, Vehicle Excise Duty (VED) is calculated on the car's carbon dioxide (CO2) emissions. From 1 April 2018, pure electric cars are exempt from paying VED to offer full support for those opting for the very cleanest cars and vans. Compare this with someone, deciding to buy a vehicle that emits more than 255g/km of CO2 will have to pay £2,070 as VED. 

London Congestion Charge

 From 8 April 2019 you may have to pay a charge for driving within the Ultra Low Emission Zone (ULEZ). The Congestion Charge is an £11.50 daily charge for driving a vehicle within the charging zone between 07:00 and 18:00, Monday to Friday. Good news, if you drive a pure electric vehicle you are exempt from this charge!

Workplace electric vehicle charging

The government announced at Autumn Budget 2017 that employer- provided electricity, provided from workplace charging points for charging employees' own electric vehicles, is exempt from being taxed as a BIK from 6 April 2018. The legislation for this exemption was introduced at Finance Bill 2018-19. 

VAT

Electricity has a different VAT treatment. Petrol, diesel & even Hydrogen is considered as fuel and is taxed at 20% VAT, while electricity is not considered as fuel and if you charge your vehicle at home, non-business & charity is taxed at 5%. Although, we must mention that if you charge at your workplace then you will be paying 20% VAT.

 

What you can claim

UK government does provide various incentives that you are entitled to if you are using pure electric vehicles.

Approved Mileage Allowance Payments (AMAPs)

AMAPs are applied to employee-owned vehicles that are used for business mileage, providing the pence per mile rate at which HMRC allows employers to reimburse their employees, without liability to Income Tax or National Insurance Contributions. If reimbursements in excess of the AMAPs rates are made, the excess is reportable to HMRC.

You can claim 45p for the first 45p for the first 10,000 miles and 25p for above 10,000 miles.

Have you considered have a company vehicle? Check out the company vehicle section and see what benefit you can get as an employee.

Company

Employer

What you get

The UK government provides companies with various grants to help you switch your fleet to zero emission vehicles and make a difference to the environment.

Government Grants

The UK government offers grants to support the wider use of electric and hybrid vehicles via the Office of Low Emission Vehicles (OLEV). The amount of the grant depends on the category of the vehicle (cars, vans, motorcycles, mopeds, taxis). Not all low-emission vehicles will get a grant. Only vehicles that have been approved by the government are eligible for a grant.

 Plug-in vehicle grant scheme: The Plug-in vehicle grant scheme (the PIVG scheme) is a technology-neutral consumer incentive scheme designed to support the uptake of ultra-low emission vehicles (ULEVs). It was launched in 2011 as part of a package of government measures to achieve the UK’s carbon reduction targets. The PIVG scheme offers grants to reduce the price of ULEVs.

The PIVG scheme offers grants off the price of ULEVs.

Cars - The grant will pay for 35% of the purchase price for these vehicles, up to a maximum of £3,500.

Vans - The grant will pay for 20% of the purchase price for these vehicles, up to a maximum of £8,000.

Workplace Charging Scheme

The Workplace Charging Scheme (WCS) is a voucher-based scheme that provides support towards the up-front costs of the purchase and installation of electric vehicle charge-points, for eligible businesses, charities and public sector organisations.

The new system will pay up to 75% of the purchase and installation costs, up to a maximum of £500 per socket. The WCS grant is limited to the installation of 20 chargepoints sockets across multiple locations / sites for each applicant. When your installer redeems the voucher, the system checks the installation costs provided by your installer and generates the grant level that the installer will discount from your bill.

Transport for London (TfL) Scrappage scheme  (Vans)

Transport for London (TfL) provides a grant of £6,000 for businesses to switch to electric vans by scrapping their combustion (pre Euro 6) light vans. The grant payment is made up of £3,500 for scrapping eligible vehicles plus a £2,500 contribution towards running costs (including insurance) of a replacement electric vehicle(s).

Vehicle tax

For the first year, Vehicle Excise Duty (VED) is calculated on the car's carbon dioxide (CO2) emissions. From 1 April 2018, pure electric cars are exempt from paying VED to offer full support for those opting for the very cleanest cars and vans. Compare this with someone, deciding to buy a vehicle that emits more than 255g/km of CO2 will have to pay £2,070 as VED.

Employers’ Class 1A National Insurance Contributions

If you as a company provide company cars to your employees, you pay Class 1A National Insurance Contributions (NIC) on these cars and fuel at 13.8%. NIC is linked to the P11D value and the CO2 emission figure of a vehicle. If you provide an electric vehicle to your employee you can reduce your NIC contributions significantly.

What you can claim

Enhanced Capital Allowances (ECAs)

 If as a business you buy cars for your business, you can take advantage of the ECAs if you buy a pure electric vehicle. An ECA allows a business to write off the whole cost of an asset against taxable profits in the year of purchase.

 

Employee: 

What you don’t have to pay

UK government does provide various subsidies and exemptions to champions who drive the cause for lowering the emissions.  

Company car tax

The provision of a company car that is available for the employee’s private use is treated as a benefit in kind (BIK). But electric vehicles currently have a tax rate of 16% as compared to other combustion vehicles that have tax rates ranging from 28% - 37%. Good news! From April 1, 2020 the tax rate for pure electric vehicles drops to 2%.

London Congestion Charge

From 8 April 2019 you may have to pay a charge for driving within the Ultra Low Emission Zone (ULEZ). The Congestion Charge is an £11.50 daily charge for driving a vehicle within the charging zone between 07:00 and 18:00, Monday to Friday. Good news, if you drive a pure electric vehicle you are exempt from this charge! 

Van benefit charge

If your employer provides you with for private use, a van benefit charge is levied on you. The charge is set at a flat rate: £3,350. But if you have an electric van, you only pay 40% of the full van benefit charge!

Car and van fuel benefit charge

If your employer provides you with a car including fuel and a portion of it is used for private mileage and is not repaid in full back to the employer, a car fuel benefit charge is applicable on the cash equivalent of the BIK represented by that fuel. Similarly,  If your employer gives you a van to use which is subject to the van benefit charge and pays for their fuel, you will need to pay a fuel benefit charge. Van fuel benefit charge is set at a flat rate, £633 in 2018-19.

Don’t sweat! If you switch to an electric vehicle, there is no fuel benefit charge as electricity is not treated as fuel!