Low-emission vehicles eligible for ‘plug in’ grants of up to £8,000

The government have released another welcome scheme which gives a discount of up to £8,000 on the price of a brand new low emission vehicle. The grant is issued straight to vehicle dealerships and manufacturers meaning you do not need to do anything if you would like to purchase one of these vehicles.

The vehicles eligible for a grant are:

• cars
• motorcycles
• mopeds
• vans
• taxis
• large vans and trucks

Cars

Eligible cars will have CO2 emissions of less than 50g/km and must have an electric mileage range of 70 miles or more between charges.

• The grant covers up to 35% of the cost up to the value of £3,000.
• The recommended retail price (Including delivery fees and VAT) must be less than £50,000.
• If your new car is pure electric there is no car benefit charge this tax year this and next tax year it will be just 1% off the list price (2% for 2022/23 – 2023/24 inclusive 2%).

Vans

Eligible vans have CO2 emissions of less than 75g/km and can travel at least 16km (10 miles) without any emissions at all. View eligible vehicles here.

• The grant covers 20% of the purchase price for these vehicles, up to a maximum of £8,000.

Large vans and trucks

Eligible vehicles have CO2 emissions of at least 50% less than the equivalent conventional Euro VI vehicle that can carry the same capacity. They can travel at least 16km (10 miles) without any emissions at all. View eligible vehicles here.

• The grant covers 20% of the purchase price, up to a maximum of £20,000.
• This grant is available for the first 200 orders placed.
• Grants at the £20,000 rate are limited to 10 per customer.
  
• After the 200 order limit is reached, a maximum grant rate of £8,000 will apply.

Motorcycles

Eligible vehicles have no CO2 emissions and can travel at least 50km (31 miles) between charges. View eligible vehicles here.

• The grant will pay for 20% of the purchase price for these vehicles, up to a maximum of £1,500.

Mopeds

Eligible vehicles have no CO2 emissions and can travel at least 30km (19 miles) between charges. View eligible vehicles here.

• The grant will pay for 20% of the purchase price for these vehicles, up to a maximum of £1,500.

Grant for a vehicle charger

There is also a grant of up to £350 (including VAT) available towards the cost of installing a charger at home through the Electric Vehicle Homecharge Scheme.

Important information for businesses/ employees:

Charging

• Businesses that install charging points at work for electric vehicles can claim 100% first-year allowance.
• Employees can charge their own electric cars at the workplace with no benefit in kind tax charge ensuing. Note: if the employer pays for or reimburses the employee for charging up their own car away from the workplace the exemption does not apply. The charging point must be available to all employees. The same applies if the employee is simply a passenger in a car owned by say a friend.
• The cost of the business installing a charging point at the employees home where they have a company car is not liable to a benefit in kind charge. That would not be the case if it is regarding the employee's own car.
• If the business pays for an electric charge card to allow the employee unlimited access to local authority vehicle charging points in respect of their company car, no taxable benefit would arise. This would not be the car if it was the employee’s own car.

Mileage/ Fuel

• There is no car fuel benefit in kind charge for pure electric cars.
• If it is a company electric car, the employee, in respect of business mileage, can presently claim 4p per mile tax-free.
• If it is an employee using their own electric car for business purposes, then presently, they can claim 45p per mile for the first 10,000 miles and 25p per mile for business mileage in excess of that.
• If the business pays for an electric charge card to allow the employee unlimited access to local authority vehicle charging points in respect of their company car, no taxable benefit would arise. This would not be the car if it was the employee’s own car.

Tax / VAT

• If an employee has a company car provided by their employer under a salary sacrifice arrangement, the taxable benefit is usually the higher of the salary given up or the taxable car benefit. This is not the case if the company car has CO2 emissions of less than 75g/km.
• The vehicle excise duty (VED) rates for fully electric vehicles have been reduced to nil until at least 2025. Where the vehicle costs exceed £40,000 there is not VED expensive car supplement. There are reduced VED rates applicable to some plug in hybrid vehicles.
• Businesses can claim 130% Super deduction first year allowance for new electric cars purchased on or after 1^st April 2021 and up to and including 31^st March 2023.

Schemes

• Scotland has two electric vehicle Interest free loan schemes, one for used electric vehicles (max. loan £20,000) and one in respect of new electric vehicles (max. loan £28,000). The latter is due to come to an end on 31^st March 2021.