New Electric Car Grant Now Live – What you need to know

The new Electric Car Grant went live on 16 July 2025, offering up to £3,750 off new electric vehicles (EVs) priced under £37,000. If you are considering going green, this could be the right time to switch.

What is being offered?

• £3,750 discount for the most environmentally friendly models

• £1,500 discount for EVs meeting minimum sustainability standards

The grant is automatically applied at the point of sale

Do all EVs qualify?

Unfortunately not, only new, fully electric, approved cars qualify. You will need to check that your chosen vehicle is included in the grant scheme before you buy.

What are the benefits for my business?

If you are buying or leasing an EV for business use, this grant works alongside existing tax benefits like:

• 100% first-year capital allowances if buying a qualifying EV.  N.B. This is due to end 31 March 2026 for Corporation Tax or 05 April 2026 for Income Tax purposes, unless this is extended in the Autumn Budget.  With varying lead times, you need to be thinking about getting your order in soon enough.

• The big advantage of leasing a fully electric car is that the full monthly rental payments are deductible expenses, reducing your tax bill.

• From an employees’ Benefit in Kind (BIK) perspective, electric vehicles are often desirable, with BIKs calculated at percentages of list value, currently as low as 3%.

Together with these existing tax incentives, the new EV grant can mean that going electric might not be just good for the planet, it might be cost effective too.

When does the scheme end?

The scheme has been funded until March 2029.  However, it may close at short notice once allocated funds run out.

We are here to help

We can help you understand the tax and financial implications of buying or leasing an EV, either personally or for your business.

Please do not hesitate to contact us for advice tailored to your individual circumstances.

Further reading:  electric car grant