Plug Pulled on Electric Car Grants

On 14 June 2022, the UK Government announced that it was scrapping the plug-in car grant scheme for new orders of electric cars with immediate effect.

Introduced in 2011, the scheme was designed to narrow the cost between plug-in and petrol/diesel cars. Initially grants were for £5000.  These have been gradually whittled down in terms of size and number of models covered.

The Government justified abolishing the scheme, saying that it has fulfilled its purpose as a temporary incentive designed to kickstart the EV (electric vehicle) market. However, since the majority of plug-in cars are registered to businesses rather than individuals, the decision to scrap the scheme has drawn criticism that it sends the wrong message to motorists and prices EVs out of reach for hard-working families.

Interestingly, at around the same time that the UK Government scrapped the plug-in car grant, the Scottish Government announced an interest-free loan scheme to help Scottish businesses purchase new or used EVs. The scheme, which is funded by Transport Scotland and administered by the Energy Saving Trust, is explained further in our recent article Electric Vehicle Loans for Scottish Businesses.

If you want to know more about the VAT liabilities if you buy or use an electric vehicle for your business or work you can read our earlier blog article VAT Rules for Charging Electric Vehicles.