A summary of the government incentives and grants available to UK businesses, local authorities and individuals for charging and purchase in 2022.
In this article
*Updated with 2022 data.
Late last year, at Cop26, Boris Johnson addressed global leaders, declaring that humanity is ‘one minute to midnight on that doomsday clock and we need to act now’ on climate change and once again stated the country’s commitment to ‘phase out the use of cars with hydrocarbon internal combustion engines by 2035’ and end new ICE sales by 2030.
The UK government has been clear in its commitment to reducing harmful emissions, having already invested billions to aid the transition to electric in the transport sector – intending to lead the world by example.
As of March 2022, there are now more than 840,000 plug-in vehicles registered in the UK – consisting of 460,000 fully battery powered electric vehicles (BEVs) and 380,000 plug-in hybrids (PHEVs).
It’s believed more and more of us are on the verge of making the switch and are just looking for a final push into action. For some, last year’s petrol shortage crisis did just that, with EV dealers reporting massive spikes in interest, sales and test drives.
For many however – that incentive – needs to be financial.
We’ve pulled together details below on the current incentives and grants currently available for drivers, businesses, and local authorities when it comes to both EV purchase, and charge point set-up.
EV charging government grants 2022
As well as plug-in grants for the purchase of EVs, the government has focused investment on charge point infrastructure – to ensure the country can cope with the inevitable upcoming demand. The total funding committed by this government to vehicle grants and infrastructure is now at £2.5 billion.
£1.6 billion will be assigned to EV charging infrastructure – to support plans for the UK market to reach 300,000 public EV charge points by 2030 – almost 5 times the number of fuel pumps on the roads.
£950 million has been assigned to a rapid charging fund, to support the rollout of at least 6,000 high powered charge points across England’s motorways and major A-roads by 2035.
And a further £500 million of funding has been put aside to support local authorities in the pursuit of ‘high-quality’ EV charge point coverage.
1. The Rapid Charging Fund (RCF)
The country is already performing well when it comes to provision of rapid chargers. With a recent NGO study finding that the UK now has more rapid chargers for every 100 miles of key strategic road than any country in Europe.
The government intends to accelerate the rollout of high powered chargers on the strategic road network, supporting those taking longer journeys. As a result, the Rapid Charging Fund was announced back in March 2020 as part of a £500 million funding commitment to EV infrastructure – which increased to £950 million later that same year. The purpose of the fund is to future-proof electrical capacity at motorways and major A road service areas – in preparation for increased EV uptake. And to ‘unlock current barriers to deployment at some of these locations, enabling provision where the commercial case will not add up.’
The government wishes to bring high-quality, competitively-priced public charge points to communities across the UK. But has made clear that it expects the private sector to deliver charge points where commercially viable – and there will only be intervention in case of market failure.
2. The On-Street Residential Chargepoint Scheme (ORCS)
ORCS has supported 140 LAs to install nealy 4,000 charge points since its inception in 2017 – and has been extended to offer £20 million in 2022/23.
Open for application from local authorities, the scheme was created to increase the number of roadside / residential electric car charging stations where off-street parking isn’t available.
The On-street Residential Chargepoint Scheme is a programme run by The Energy Saving Trust on behalf of OZEV and offers funding for 60% of the capital costs involved in procuring and installing on-street electric car charge points and dedicated parking bays, up to a value of £7,500 (and up to £13,000 in the instance electrical connection costs are exceptionally high).
Local authorities can claim for funding for the purchase of an electric charging unit, related electrical component costs, DNO connection, any related civil engineering works, as well as the labour and hardware costs of installation, and the capital costs of a parking bay and traffic regulation orders.
In an update to the scheme, it has been announced that proposed charge points will need to have a minimum payment method, such as contactless. Formal regulation is set to come into place late 2022, from which point, any ORCS applications approved after this date will need to abide by it.
Local authorities can claim by submitting an application form to The Energy Saving Trust via email. You will need to have established the area demand, ideal locations and obtained quotes. Upon acceptance you’ll receive a grant offer letter from OZEV and payment of 75% of the grant within approximately 25 working days. The remaining 25% can be claimed upon project completion – with evidence of completion needing to be supplied within 30 days.
3. The Local Electric Vehicle Infrastructure (LEVI) scheme
Alongside the ORCS scheme, the government has now introduced a second funding programme for local authorities.
The local electric vehicle infrastructure scheme (LEVI) totals £450 million and will be used to aid EV hubs and on-street charging projects to support the 40-60% of people in urban areas without access to driveways.
A further £50 million has been put aside to train staff to work on charge point planning and implementation.
The scheme will begin with a £10m trial funding pot – expected to support roughly 3-8 projects.
Local authorities in England, or a partnership or consortium led by a local authority within England will be able to apply.
Eligible projects will include the introduction of on-street slow and fast charge points, rapid charge points (when installed as part of a wider project that includes on-street slow and fast charge points), street or site adaptations and solar canopies and battery storage.
Funding may cover:
The cost of the charging unit
Hardware installation costs (such as gullies, solar canopies or battery storage)
Cost of electrical connection components such as distribution network operator connection costs, smart charging and vehicle to grid technology costs
Labour costs for installation
Connected civil engineering costs
Capital costs of a parking bay and traffic regulation orders such as signage.
There’s also a requirement for charge points and connected infrastructure to be maintained for at least 7 years after installation.
Eligible projects need to:
Support the transition to EV use in a local area, with a particular focus on providing for those without driveways
Provide an improvement in accessible EV charging provision that would not otherwise be met
Show technical or commercial innovation
Charge points must have a minimum payment method such as contactless installed.
Be supported by the relevant highway authority (or landowner) with responsibility for maintenance of charge point areas.
Read more about current EV infrastructure support programmes for local authorities here.
4. The Workplace Charging Scheme (WCS)
The Workplace Charging Scheme (WCS) is a voucher-based programme offering up to £350 off the purchase and installation of an electric vehicle charge point, for a total of 40 sockets.
You can apply online via the official government site by providing information such as your site details and number of employees. After you’ve received grant approval, you’ll be supplied with a voucher that can be redeemed via OZEV approved installers, and installation will need to happen within 180 days.
It’s recently been announced that the Workplace Charging Scheme will be extended to allow SMEs to access chargers for employees.
5. EV chargepoint grant
As of 1 April 2022 the government retired the Electric Vehicle Homecharge Scheme (EVHS) and replaced it with the EV chargepoint grant.
The scheme provides funding for 75% of the costs of buying and installing EV charge points in a UK domestic property – up to a maximum of £350 (including VAT).
In order to qualify, an individual needs to own, lease, or have placed an order for a qualifying vehicle and have dedicated off-street parking at the property. To receive the funding, a customer must choose a qualifying installer, and the installer will apply for the grant on the customer’s behalf. Full details can be found here.
The updated scheme remains largely the same as the former EVHS programme, except that the customer applying must live in rented accommodation or own a flat and be able to either confirm such ownership, or give the name and address of the landlord. Customers will also no longer be able to claim for two charge points if they own a second EV.
Additionally, local authorities that own social housing can apply to the EV chargepoint grant for landlords, offering up to £350 towards the cost of purchasing and installing a chargepoint. 200 grants per local authority are available annually.
In late 2022 further support is expected for local authorities, to help install EV charge points in residential apartment block parking spaces – potentially up to the value of £30,000.
Other incentives for switching to electric vehicles
Vehicle Excise Duty
All vehicle owners must go through the process of taxing their vehicle, but because Vehicle Excise Duty (VED) is calculated according to CO2 tailpipe emissions for all vehicles registered since March 2001, most EV owners will be exempt from any charge:
Pure EVs (with list price below £40,000)
Plug-in Hybrid Vehicles
Year 1 ownership
£10-140 (depending on vehicle’s CO2 emissions)
Additional ‘Premium rate’ tax for all vehicles with a list price over £40,000: If a vehicle is listed at over £40,000 and registered after 31st March 2017, you are subject to an additional ‘Premium rate’ tax for the first 5 years of ownership on top of standard VED. This currently stands at around £320 per year. Pure EV owners are exempt from this tax too.
Benefit-in-kind tax for electric cars
Traditionally, employers have been able to offer company cars as an added benefit when attracting new employees. But uptake has been dwindling in recent years thanks to rising Benefit-In-Kind (BIK) tax rates – the tax an employee must pay for receiving this benefit, based on a vehicle’s fuel type, CO2 emissions and personal income tax percentage.
However if employers are to consider offering employees EVs the government has introduced considerably lower BiK rates as an incentive – a great benefit to pass onto employees.
Lower emission vehicles (1-50g/km emissions, 130+ mile range and registered after 6 April 2020)
Lower emission vehicles (1-50g/km emissions, 130+ mile range, registered before 6 April 2020)
‘Clean Air Zone’ charges
Part of the UK government’s efforts to improve air quality has seen the introduction of ‘Clean Air Zones’ – some of which have charging systems in place for vehicles that don’t meet minimum emission standards.
Buses, coaches, heavy goods vehicles – Euro VI
Vans, minibuses, taxis, private hire vehicles, cars – Euro 6 (diesel) and Euro 4 (petrol) – some local authorities set different standards for this vehicle type
Motorcycles – Euro 3
An example of such a zone is London’s Ultra-Low Emissions Zone, in place since 2019, and now includes postcodes up to the North and South circular roads.
Other than London, at present, only Bath and Birmingham have charging CAZ plans firmly in place. Many more cities will follow, with Bristol and Bradford planning a CAZ for 2022.
Research commissioned by Northgate Vehicle Hire found that more than a quarter of businesses with fleets don’t know about CAZ plans. With the UK’s current reliance on conventionally-fuelled vehicles estimated to be 300,000 HGVs and over 4,000,000 vans, this is a worrying statistic.
Find out more about Clean Air Zones and how you can prepare your business here.
Comparing the tax cost of owning an EV versus a petrol powered vehicle
To put the current tax rate savings for EVs into context, the table below provides an estimate of the company car tax you would expect to pay over the next few years if you chose a petrol car, versus an electric powered model.
BMW 5 Series Saloon
Electric (av UK mix) – 0cc (0 litre) EV400 S 90kWh 400PS Auto
Petrol – 2998cc (3 litre) 540i xDrive M Sport Sport-Auto
April 2022 – April 2024
Salary sacrifice scheme
Many businesses (such as Mer) are now offering their employees the opportunity to lease their EV via a salary sacrifice scheme – i.e. pay for it in a similar way they make their pension contributions. Such an arrangement will involve a business purchasing/leasing an EV as a business expense, and passing the cost straight onto the employee. They can deduct the cost of the EV from the employee salary pre PAYE, where tax and NI is taken. So the employee pays less tax and the net cost of leasing the EV is reduced – all at no cost to the employer, other than administration time.
Putting it into context, a 20% standard rate tax payer will save £20 in tax for every £100 of monthly lease, with 40% tax payers saving £40. Additionally, those earning less than £4,189 can save £12 in National Insurance, or £2 a month if earning above this threshold.
Grants for EV purchase: The Plug-In Car, Van & Truck Grant
Certain new low-emission vehicles are eligible for a government grant.
Cars with CO2 emissions of less than 50g/km that can travel at least 112km (70 miles) without any emissions at all, cost less than £32,000 RRP (incl. VAT and delivery fees) are eligible for a grant for 35% of the price, up to a max of £1,500.
Wheelchair accessible vehicles that have been converted from a passenger vehicle, with CO2 emissions of less than 50g/km that can travel at least 112km (70 miles) without any emissions at all, cost less than £35,000 RRP (incl. VAT and delivery fees) are eligible for a grant for 35% of the price, up to a max of £2,500.
1000 grants will be available between 1 April 2022 and 31 March 2023.
Motorcycles & mopeds
Motorbikes and mopeds with no CO2 emissions that can travel at least 30km (mopeds) / 50km (motorbikes) between charges, qualify for a grant. Motorcycles must cost less than £10,000 RRP (incl. VAT and delivery fees) are eligible for a grant for 35% of the price, up to a max of £500. Mopeds must cost less than £10,000 RRP (incl. VAT and delivery fees) are eligible for a grant for 35% of the price, up to a max of £150.
View the official list of qualifying mopeds and motorcycles here.
Small & large vans
Small vans, less than 2,500 kg in gross weight and less than 50g/km CO2 emissions and can travel at least 96km (60 miles) without any emissions at all, qualify for 35% of the purchase price, up to a maximum of £2,500.
Large vans between 2,500kg and 4,250kg gross weight and less than 50g/km CO2 emissions and can travel at least 96km (60 miles) without any emissions at all, qualify for 35% of the purchase price, up to a maximum of £5,000.
You can claim a total of 1000 plug-in van and truck grants for your business each year, which resets every April.
View the official list of qualifying small and large vans here.
Purpose-built taxis (Dynamo Taxi’s and LEVC TX’s) which have CO2 emissions of less than 50g/km and can travel at least 112km without any emissions, qualify for a grant of 20% of the purchase price, up to a maximum of £7,500.
Small & large trucks
Small trucks with a gross weight between 4,250kg and 12,000kg with CO2 emissions of at least 50% less than the equivalent conventional Euro VI vehicle that can carry the same capacity and can travel at least 96km without any emissions, qualify for a grant of 20% of the purchase price, up to a maximum of £16,000.
The truck grant is available for your first 250 orders only. Grants at the £16,000 rate are limited to 10 per customer and after the 250 order limit is reached, a maximum grant rate of £5,000 will apply.
Large trucks with a gross weight over 12,000kg with CO2 emissions of at least 50% less than the equivalent conventional Euro VI vehicle that can carry the same capacity and can travel at least 96km without any emissions, qualify for a grant of 20% of the purchase price, up to a maximum of £25,000.
Grants at the £25,000 rate are limited to 5 per customer and 100 grants total. After the 5 order limit or all 100 grants are allocated, the max a business can apply for is £16,000 – of which you can apply for a total of 10. There are 250 £16,000 grants available. After that, the maximum a business can apply for is £5,000.
You can claim a total of 1000 plug-in van and truck grants for your business each year, which resets 1 April.
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