There’s a lot of information to process when you switch to electric. To make things easier, we’ve put all the important info about grants, tax and insurance into one place.
Here is your guide before you plug in and go!
Electric Car Grant
- Producing 0gCO2/km at the tailpipe
- Having a minimum battery range of 100 miles (160km)
- Having a 3-year/60,000 mile warranty
- Be powered by a battery with an 8-year/100,000 mile warranty
Am I eligible?
The grant you can get depends on the type of car you wish to buy.
The government has two categories:
Band 1: £3,750 Grant
This is the maximum discount, and you were right, that £3,750 is the headline number! To qualify for this top-tier grant, cars must:
- Have the highest sustainability scores during manufacturing.
- Only a handful of models currently meet these criteria (we’ll list them next).
Band 2: £1,500 Grant
Most eligible EVs qualify for a £1,500 discount if they meet the minimum environmental and price criteria.
To qualify for either level:
- You must be buying a brand-new electric car (not used).
- The car’s list price must be £37,000 or less before the grant.
How to claim
There is no application process for getting a government grant for your EV; the grant will be automatically applied at point of purchase.
You may be asked to fill out a short questionnaire, but overall the process is straightforward.
Important Caveats
- Only new EVs qualify: used cars do not get the grant
- There’s a price cap of £37,000: many popular EVs sit above this, so you won’t always get a discount.
- The grant runs to 2030, but it could run out earlier if funds are exhausted.
- Only the greenest vehicles get £3,750. Most currently fall into the £1,500 category.
- Manufacturers must apply and qualify, so some models you want might not be on the list yet.
Electric Vehicle Home charge Overview
The EV Chargepoint Grant (administered by OZEV) covers up to 75% of the total cost (including purchase and installation) of a home charger, capped at up to £500 per socket.
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Flat Owners and Renters
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Eligibility: You must own and live in a flat, or rent any residential property (house or flat).
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Vehicle Requirement: You must own, lease, or have on order an eligible electric or plug-in hybrid vehicle.
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Parking Requirement: You must have designated, private off-street parking.
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Households with On-Street Parking Only
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Eligibility: You own or rent a home but do not have off-street parking.
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Requirement: You must be installing an approved cross-pavement charging solution (such as a gully/channel in the pavement approved by your local council).
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Residential Landlords
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Eligibility: Landlords and property management companies installing sockets at properties they let out.
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Limit: Up to £500 per socket, for up to 200 sockets per financial year.
Who Does Not Qualify?
Key Requirements & How to Apply
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Authorised Installers: The installation must be completed by an OZEV-authorised installer using approved smart chargepoint equipment.
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Process: For renters/flat owners, you start the application online via the GOV.UK portal with your vehicle/tenancy details, and the installer claims the grant on your behalf by deducting up to £500 directly from your total invoice.
Electric car tax
Most EV drivers are exempt from the following taxes in the UK:
Electric Vehicle excise duty (VED)
Electric vehicles (EVs) in the UK are no longer exempt from Vehicle Excise Duty (VED). The exact amount you pay depends on when the vehicle was registered and its original list price.
1. New Electric Cars (Registered On or After 1 April 2025)
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First Year Rate: £10
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Second Year Onward (Standard Annual Rate): £200 per year
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Expensive Car Supplement: If the new vehicle’s list price exceeds £50,000, an additional supplement (currently £425–£440/year depending on tax year adjustments) applies from years 2 to 6 (payable for 5 years)
2. Existing Electric Cars (Registered Before 1 April 2025)
3. Electric Vans and Commercial Vehicles
Value added tax (VAT)
In the UK, the rate of Value Added Tax (VAT) applied to electric vehicle (EV) charging depends entirely on where you charge:
1. Home Charging — 5% VAT
2. Public Charging — 20% VAT
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Rate: 20% (standard rate).
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Reason: HMRC classifies charging at a public station (on-street chargers, rapid chargers at service stations, hub chargers) as a commercial service rather than a domestic energy supply.
Key Points to Note
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Business Expense/Reclaiming VAT: If you are a business user or company car driver, you can reclaim the 20% VAT paid on public charging, provided the vehicle is used for business purposes and you keep valid VAT receipts.
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The “Pavement Tax” Controversy: Consumer and automotive groups have continuously campaigned to lower the public charging VAT rate from 20% to 5% to eliminate the cost disparity faced by drivers without driveways or off-street parking. While tax tribunal challenges have been brought by industry groups, HMRC’s official guidance remains at 20% for public charging.
Insurance
You may find that the industry generally places EVs in a higher insurance group rating than petrol or diesel cars of similar size. This is largely due to the lack of historical data from which insurance companies base their premiums.
The most important variable in a car insurance quote of any kind is the driver – insurance companies will consider your risk profile before giving you a quote. The good news is, as an EV driver, you tend to be considered a safer and lower-risk driver, as a result of your eco-conscious decision to drive green.
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