Getting Started: Financial Incentives for Electric Fleets

5 min to readElectric vehicles
Demand for electric cars is growing quickly in the UK, and there's an increasingly broad business case for deploying them on your fleet. Find out more in our guide.
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Grant Funding for New Electric Cars

The price gap between electric cars and their petrol or diesel counterparts is shrinking. A recent study by BloombergNEF and Transport & Environment predicts pricing will align across the market by 2027 [1], removing one of the biggest barriers among drivers, according to LeasePlan research [2].

However, fleets can already claim financial support to offset the higher purchase costs. The Plug-in Car Grant provides funding for up to 35% of the list price (which includes optional extras, VAT and delivery), up to a maximum of £1,500 per vehicle [3]. Administered by the government's Office for Zero Emission Vehicles (OZEV, formerly OLEV), this can help reduce lease or purchase costs for fleet operators.

To qualify, vehicles must:

A list of vehicles eligible for the Plug-in Car Grant is available here.

Similar grant funding is also available for electric vans. Take a look at our van support guide to find out more.

Tax Relief for Leasing or Buying Electric Cars

HM Revenue & Customs offers tax relief for organisations deploying electric and plug-in hybrid vehicles, which also helps to make going electric more accessible. Eligibility was tightened in April 2021, and the current rates are as follows:

Reduced Vehicle Excise Duty

HM Revenue and Customs introduced a new Vehicle Excise Duty system in April 2017 [6], with discounts for cars with low CO2 emissions.

Current rates for low-CO2 vehicles are as follows:

CO2 emissions
First Year Rate
Standard Rate
Standard Rate
(list price <£40,000)
(list price >£40,000)
£10 (£0)
£165 (£155)
£520 (£510)
£25 (£150)
£165 (£155)
£520 (£510)

Tax for Electric Company Cars

Employers who provide company vehicles for private journeys are liable for annual Class 1A National Insurance contributions (NICs). With the Health and Social Care Levy, introduced in April 2022 [7], the amount payable is 15.05% of the taxable value of the vehicle, calculated as a percentage of its list price (or P11d) based on its CO2 emissions [8].

A reformed set of bands was introduced in April 2020, renewing incentives for vehicles emitting 50g/km or less [9]. This includes:

Rates are frozen at 2022/23 levels until the start of April 2025 [10], which means an electric vehicle should be significantly cheaper than an equivalent petrol, diesel or hybrid car for the duration of a typical lease or finance arrangement.

Vauxhall Corsa-e SRi Nav Premium
Vauxhall Corsa 1.2T SRi Nav Premium
Hyundai Ioniq Electric Premium 
Skoda Octavia 2.0 TDI SE Tech 116PS DSG
Jaguar I-Pace EV400 SE
Jaguar F-Pace D200 AWD SE

Take a look here for a full list of company car tax bands.

Further Incentives for Electric Fleets


[1] Bannon, E. (2021.). EVs will be cheaper than petrol cars in all segments by 2027, BNEF analysis finds. [online] Available at: [Accessed 29 Mar. 2022].

[2]. LeasePlan (2021). LeasePlan Mobility Insights Report: EVs and Sustainability Edition. [online] Available at: [Accessed 29 Mar. 2022].

[3] Office for Zero Emission Vehicles (2021). Low-emission vehicles eligible for a plug-in grant. [online] Available at: [Accessed 29 Mar. 2022].

[4] HM Revenue & Customs (2020). Claim capital allowances. [online] GOV.UK. Available at:

[5] HM Revenue & Customs. (2020). Capital allowance carbon dioxide emissions thresholds for business cars, goods vehicles and equipment for gas refuelling stations from April 2021. [online] Available at: [Accessed 29 Mar. 2022].

[6] Driver and Vehicle Licensing Agency. (2017). New vehicle tax rates from 1 April 2017. [online] Available at: [Accessed 29 Mar. 2022].

[7] HM Revenue & Customs. (2021). Health and Social Care Levy. [online] Available at: [Accessed 29 Mar. 2022].

[8] Government Digital Service (2014). National Insurance rates and categories. [online] GOV.UK. Available at: [Accessed 29 Mar. 2022].

[9] HM Revenue & Customs. (2019). Company car benefit – the appropriate percentage (480: Appendix 2). [online] Available at: [Accessed 29 Mar. 2022].

[10] HM Treasury (2020). Budget 2020. [online] Available at: [Accessed 29 Mar. 2022].

[11] Office for Low Emission Vehicles. (2021). Workplace Charging Scheme guidance for applicants, installers and manufacturers. [online] Available at: [Accessed 29 Mar. 2022].

Published at 29 April 2022
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29 April 2022
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