The EVolution of Electric Vehicles || Tax Benefits in the UK 

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Abstract

      Tax Benefits in the UK

 

  • Cost-effective commuting in central London – Electric vehicles enjoy exemptions from both London’s congestion charge and ULEZ charge, resulting in daily savings of £27.50.  

  

  • Road Tax exemption – Fully electric vehicles are not subject to Road Tax, providing additional financial relief.  

  

  • Favorable Benefit in Kind (BiK) rate – With rates as low as 1% for the 2021/2022 financial year and 2% for the 2022/2023 financial year, electric vehicles offer attractive tax benefits.  

  

  • Incentive for New Low Emission Cars – Eligible for a grant of up to £2,500, provided the car is new, approved, and costs less than £35,000.  

  

  • Grants for Purpose-Built Low Emission Taxis – Taxis such as Dynamo and LEVC can receive grants of up to £7,500 for meeting low emission criteria.  

  

  • Environmental Criteria for Grants – To be eligible, cars and taxis must have CO2 emissions below 50g/km and a minimum emission-free range of 70 miles.  

  

  • Grant for Small Vans – Eligible for 35% of the purchase price, up to £3,000, for small vans with a gross vehicle weight (GVW) of less than 2.5 Tonnes.  

  

  • Grant for Large Vans – Eligible for 35% of the purchase price, up to £6,000, for large vans with a gross vehicle weight (GVW) between 2.5 and 3.5 Tonnes.  

  

  • Criteria for Eligible Vans – Vans with CO2 emissions below 50g/km qualify for these grants.  

  

  • Range Requirement for Eligible Vans: Vans must be able to travel at least 96km (60 miles) emission–free to be eligible for the grants.  

  

  • Grant for Small Trucks – Eligible for a 20% grant, up to £16,000, for small trucks with a gross vehicle weight (GVW) between 3.5 and 12 Tonnes (N2). Limited to the first 250 orders per fiscal year, with a cap of 10 per customer.  

  

  • Grant for Large Trucks – Eligible for a 20% grant, up to £25,000, for large trucks with a gross vehicle weight (GVW) exceeding 12 Tonnes (N3). Limited to the first 100 orders per fiscal year, with a cap of 5 per customer.  

  

  • Range Requirement for Trucks: Eligible trucks must be able to travel at least 60 miles without emitting pollutants.  

  

  • Rapid Capital Allowances – Enjoy a 100% allowance against corporation tax when purchasing a vehicle outright, applicable in the year of purchase.  

  

  • Comprehensive Expense Coverage – Vehicle running expenses, including electric charges, insurance, and repairs, are considered allowable company expenses.  

  

 

Shubham Neupane 

GNS Associates 

Visit our website: Accountants in Uxbridge 

 

 

Cite this work

Researchers should cite this work as follows:

  • GNS Associates (2024), "The EVolution of Electric Vehicles || Tax Benefits in the UK ," https://stemedhub.org/resources/4624.

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