Government Incentives for Electric Cars and Vehicles in the UK (Guide to Grants, Tax Breaks & Charging Schemes)
Government Incentives for Electric Cars and Vehicles in the UK (Guide to Grants, Tax Breaks & Charging Schemes)
Are you considering buying an electric car or vehicle? The UK Government offers a variety of incentives that can reduce your upfront costs and ongoing expenses. From grants for EV chargers to tax exemptions and local benefits, these schemes can make the switch to electric more affordable for individuals, businesses, and fleet owners
Whether it helps in the cost of installing an electric car charger, lowering the vehicle's list price or benefiting from local incentives for parking benefits and permits, this guide explains exactly what’s available and how to apply.
UK Government Electric Car Grants: What’s Changed Since 2022?
Up until June 2022, the plug-in car grant offered buyers up to £5,000 to put towards the cost of a new battery electric or plug-in hybrid car, but this has since been withdrawn. This grant helped to encourage the purchase of electric vehicles, which are beneficial for the environment and the local area.
Despite the withdrawal of this government grant, there are still several grants and incentives to incentivise the purchase and uptake of electric vehicles in 2025:
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Tax breaks for company cars and private owners
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Grants for home and workplace charging
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Exemptions from congestion charges and low-emission zones
The electric car grants were originally in place as the cost of the large battery pack used to power the vehicles was extremely high and often out of reach for the general public. Although the price difference between electric vehicles and petrol and diesel cars has reduced, EVs have become more common on the roads, leading to a reduction in government incentives and aid.
Electric Vehicle Tax Breaks
The UK government's incentives for electric cars and vehicles offer several tax breaks to encourage the adoption of these low-emission vehicles for a positive environmental impact. These incentives aim to reduce the financial burden on individuals and businesses purchasing or leasing electric vehicles, consequently encouraging cleaner transport and contributing to the country's net-zero carbon emission goals.
Switching to an electric vehicle doesn’t just cut emissions, it can also reduce your tax bill. Here’s how you can save in 2025:
- Benefit-in-Kind (BiK) Tax
Benefit-in-Kind tax is a company car tax on employees who receive benefits from their employers, such as a company car. Electric vehicles have a much lower BiK compared to petrol or diesel cars. For the tax year 2025/26, the BiK rate for pure electric vehicles increased from 2% of the car’s value to 3%, a rate that is still significantly lower than that for conventional vehicles, which can be as high as 37%. The BiK rate will continue to increase annually until at least 2029/30.
- Vehicle Excise Duty (VED)
VED, commonly known as vehicle road tax, is a tax that vehicles must pay to use the roads in the UK. In 2024, pure electric vehicles benefited from an exemption to this. Any new vehicles registered on or after 1st April 2025 will pay the lowest first-year rate of £10, followed by an annual rate of £190 from the second year onwards.
- First-Year Allowance (FYA)
The first-year allowance is a form of tax relief that allows businesses to deduct the full cost of qualifying assets, like electric vehicles, from their pre-tax profits. This incentive is available until 31 March 2026.
- Congestion Charge and Clean Air Zones
Electric vehicles are exempt from congestion charges in clean air and low-emission zones such as London’s Ultra Low Emission Zone (ULEZ) or Birmingham’s Clean Air Zone. This exemption makes driving an electric vehicle in these zones more cost-effective.
Government EV Charging Schemes
Installing an EV charger at home or work? You may be able to claim a government grant:
- OZEV Home Charging Grant
The EVHS (Electric Vehicle Homecharge Scheme) is a government plug-in grant for residential properties. As of 2024, this scheme has transitioned to the EV Chargepoint Grant, which focuses on rental properties and leasehold properties, offering up to 75% off installation costs or charge point sockets, capped at £350. There isn't currently a grant available for those who own a house.
The scheme is administered by OZEV (The Office for Zero Emission Vehicles).
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Workplace Charging Scheme (WCS)
Provides businesses with up to £350 per socket for installing chargepoints (up to a maximum of 40 sockets)
Tip- Apply early to any grants. Grants are often reviewed annually, and eligibility rules can change.
Local UK Government Incentives for Electric Cars
A large part of the nationwide plan to expand the charging network is local UK Government incentives for electric cars and vehicles. These local grants and financial incentives aim to help local communities transition to fully electric cars and vehicle driving.
A few local schemes are running currently that are available to give communities a boost, such as street parking permits, free parking spaces (as seen in Oxford and Milton Keynes), use of bus lanes and free use of charging stations (as seen with the Dundee free public charging scheme for residents). It’s a good idea to see what’s on offer from your local public authority.
To check local incentives, search “[Your council name] electric vehicle incentives” on Gov.uk or your council's official website.
At Volta EV, we’ve helped thousands of drivers save money by finding the right electric vehicle charger and guiding them through the grant and tax incentive application process. Whether you’re a homeowner, business owner, or fleet manager, we’ll make sure you get the maximum savings available.