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Home - News - A 2022 guide to government incentives & grants for EVs

A 2022 guide to government incentives & grants for EVs

A summary of the government incentives and grants available to UK businesses, local authorities and individuals for charging and purchase in 2022.

*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.

Pure EVs (with list price below £40,000)Plug-in Hybrid Vehicles
Year 1 ownership£0£10-140 (depending on vehicle’s CO2 emissions)
Annual charge£0£140

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.

Tax yearPure EVsLower 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)
2022-242%2%2%

‘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.

Jaguar I-PaceBMW 5 Series Saloon
PoweredElectric (av UK mix) – 0cc (0 litre) EV400 S 90kWh 400PS AutoPetrol – 2998cc (3 litre)
540i xDrive M Sport Sport-Auto
P11D£64,440£52,740
CO2 Level0g/km195g/km
April 2022 – April 2024
BIK Rate2%37%
BIK Value£1,289£19,514
Tax @20%£258£3,903
Tax @40%£516£7,806
Tax @45%£580£8,781
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