Fleet tax advantages and schemes
What the LEXperts say
There are significant benefits for businesses who adopt EV fleets or create workplace charge points. The UK government’s driving and transport site lists the current schemes.
Taxation benefits
EV owners enjoy the lowest first-year vehicle tax rates. Our tax guide (PDF, 1.5MB) summarises the considerations for fleets and company motorists. Battery Electric Vehicles (BEV) benefit from a reduced benefit-in-kind (BIK) rate that will move to 3% for the 2025/26 financial year. This is significantly lower than the typical rate for petrol and diesel vehicles, which can range as high as 37% with the highest emission rates.
Plug-in vehicle grants
The UK government offers grants for plug-in vehicles, including plug-in hybrids, exclusively for commercial use. This grant, up to 35% of the purchase price for vans, is passed directly to our clients, ensuring significant savings.
Capital allowance
Business owners can immediately offset the full cost of new EV purchases with a 100% capital allowance in the first year, drastically reducing tax liabilities. This incentive is part of the UK government's effort to promote sustainable business practices and reduce carbon emissions. By taking advantage of this allowance, businesses can lower their tax burden whilst helping to reduce their impact on the environment.
Salary sacrifice tax incentives
Employees can sacrifice a fixed amount of their salary each month for a brand-new car. This amount is taken before income tax and National Insurance, helping both employees and businesses save on contributions. Plus, the monthly payment covers everything: fully comprehensive car insurance, road tax, breakdown cover, MOT, maintenance, replacement tyres, and accident assistance.
There are no upfront payments or deposits. Dependent on the customer scheme architecture, after an initial exclusion period, there may be no charge for early termination if employees resign or are made redundant. Customise a brand-new car, know exactly what the monthly payments will be, and rest assured that everything is taken care of.
Article published February 2025