Electric Vehicle Grants and Incentives Explained
Discover the benefits of electric vehicle tax incentives and grants available for electric vans. Here's a breakdown of the various incentives and how they work:
- Road Tax Exemption for Electric Vans:
Currently, electric vans are exempt from Vehicle Excise Duty or "road tax." However, starting in 2025, the government plans to introduce new road tax rules for electric vehicles.
- Benefit in Kind (BIK) for Electric Vehicles:
BIK is a tax on employees who receive additional benefits, including company vehicles. Since 2021, the BIK rate for all-electric vans has been reduced to zero. This encourages businesses to switch to electric vans and offers advantages such as not having to pay taxes on personal mileage. It also helps employers save money on National Insurance. Additionally, if you charge your electric van at your workplace, you won't have to pay any BIK tax, providing an added benefit for employees.
- Exemption from Congestion Charges and ULEZ:
Using an electric van in London can save you £3,915 per year on congestion charges. If your current van does not meet the Ultra Low Emission Zone (ULEZ) standards (Euro 5 or older), you could save an additional £3,262.50 per year. All 100% electric vans are exempt from the London Congestion Charge and ULEZ charge. Many other cities in the UK are also implementing their own emission zones and restricting access for non-electric vehicles.
- VAT Reclamation for Electric Vehicles:
The rules for reclaiming Value Added Tax (VAT) on an electric van are the same as for any other type of vehicle.
Government Incentives and OZEV Grants for Electric Vehicles:
The Office for Zero Emission Vehicles (OZEV), previously known as OLEV, offers various grants to support customers in transitioning to electric vehicles. The available incentives include:
- Plug-in Vehicle Grant (PiVG) for Ultra-Low and Zero Emission Vans.
- Electric Vehicle Homecharge Scheme (EVHS).
- Workplace Charging Scheme (WCS).
- On-street Residential ChargePoint Scheme (ORCS).
Plug-in Vehicle Grant for Electric Vans:
The plug-in vehicle grant is a government subsidy aimed at supporting businesses in adopting electric vehicles. Currently, the grant rates are £5,000 for large vans and £2,500 for small vans, with a limit of 1,000 grants per customer per year. The popularity of this grant is reflected in the significant increase in plug-in van grant orders in 2021 compared to 2020. To qualify, electric vans must have emissions of less than 50g/km CO2 according to the 'WLTP' emissions test standard and be able to drive 70 miles emission-free.
Claiming the Plug-in Vehicle Grant:
To claim the plug-in vehicle grant for your electric van, you don't need to take any action. The dealer will claim the grant on your behalf and deduct it from the van's purchase price.
Workplace Charging Scheme (WCS):
The WCS supports businesses, charities, and public bodies in purchasing and installing charging points for their employees. It reduces the installation cost by up to £14,000, allowing up to £350 per point for a maximum of 40 points.
- Can I get the electric vehicle grant for my van if I’m purchasing on finance?
Yes, you can apply for the electric vehicle grant if you're purchasing a van on finance. The grant will be deducted from the total price, reducing your monthly payments.
- Can I be paid the electric vehicle grant in cash?
The electric vehicle grant cannot be paid in cash. It will be claimed by your dealer and deducted from the purchase price.
- Can I apply twice for the OZEV plug-in vehicle grant?
You can apply for the OZEV plug-in vehicle grant multiple times if you meet all the criteria for each vehicle.
For more information on these grants and incentives, consult your preferred Mercedes-Benz Vans Dealer or visit the relevant government websites.