Does the WCS grant reduce my capital allowances claim?

Yes. Capital allowances are calculated on the net cost you actually paid, not the gross cost. If you install a charger for £2,000 and receive a £350 WCS grant, your AIA claim is on £1,650, not £2,000. The grant itself is not taxable income for most businesses, but it does reduce the qualifying expenditure base.

What is the benefit-in-kind rate for a pure electric company car in 2026/27?

The BIK rate for a fully electric company car is 3% in 2025/26, rising to 4% in 2026/27, and 5% in 2027/28. This compares to 25–37% for petrol and diesel cars. For a £35,000 electric car in 2026/27, the annual BIK charge is £1,400 (4% of P11D value). A 20% taxpayer would pay £280 per year in tax on this benefit.

Can a sole trader claim AIA on a home EV charger used for a business vehicle?

Potentially, but only for the business-use proportion. If a sole trader installs a home EV charger and uses their EV 60% for business, they may be able to claim AIA on 60% of the charger cost. The exact treatment depends on HMRC guidance at the time and the specific circumstances. This is an area where professional advice is strongly recommended.

EV charger tax relief for businesses: capital allowances, BIK and grants.

Installing workplace EV chargers unlocks three separate tax advantages: 100% first-year deduction via AIA, 0% benefit-in-kind on employee charging, and very low BIK rates on electric company cars.

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Capital allowances (AIA): deductible in year 1

100%

BIK on workplace EV charging for employees

BIK rate on pure electric company car (2026/27)

Tax reliefs available to UK businesses installing EV chargers

A UK business installing workplace EV chargers in 2026 can access three distinct tax advantages, each working independently of the others:

Relief	What it covers	Value
Annual Investment Allowance (AIA)	Full hardware and installation cost, deductible in year 1	Up to £1m/year
BIK exemption on workplace charging	Electricity provided to employees for EV charging at work	0% — no employee tax
Low BIK rate on electric company cars	Employees using a company-provided EV	4% of P11D value in 2026/27

This guide covers the general position as of November 2026. Tax rules change. Consult a qualified accountant or tax adviser for advice specific to your business before making decisions based on this information.

Annual Investment Allowance: deduct 100% in year one

EV charger hardware and installation qualifies as plant and machinery for capital allowances purposes. Under the Annual Investment Allowance (AIA), businesses can deduct up to £1 million of qualifying plant and machinery expenditure in the tax year of purchase.

For the vast majority of businesses installing workplace EV chargers, the total cost falls well below the AIA threshold. This means the full net cost of the installation (hardware plus labour) is deductible against taxable profit in year one.

For a company paying corporation tax at 25% (the main rate from April 2023):

A £10,000 EV charger installation generates a £2,500 corporation tax saving in year one.
Combined with a £3,500 WCS grant (10 sockets × £350), the effective net cost is reduced by £6,000.

Businesses below the £50,000 profit threshold pay the small profits rate of 19%, giving a proportionally smaller but still meaningful tax saving.

0% benefit-in-kind on workplace EV charging

Under HMRC's benefit-in-kind rules, a benefit provided to an employee by their employer is normally taxable. Workplace EV charging is a deliberate exemption.

Since April 2018, electricity provided by an employer for charging an electric or plug-in hybrid vehicle at a workplace chargepoint is not a taxable benefit. The exemption applies whether:

The vehicle is a company car or the employee's own car
The employee charges during working hours or outside them
The electricity is metered and tracked per vehicle or pooled

This means employers can offer free workplace charging to all employees with EVs without creating a tax liability for the employee or an employer National Insurance liability. The only condition is that the chargepoint must be at or near the employer's premises.

BIK rates on electric company cars

Electric company cars attract significantly lower benefit-in-kind rates than petrol or diesel equivalents. For employees using a company-provided car, this makes an EV substantially cheaper to run from a tax perspective.

Tax year	Pure electric BIK rate	Typical petrol/diesel BIK rate	Difference
2024/25	2%	25–37%	Up to 35pp lower
2025/26	3%	25–37%	Up to 34pp lower
2026/27	4%	25–37%	Up to 33pp lower
2027/28	5%	26–37%	Up to 32pp lower
2028/29	7%	27–37%	Up to 30pp lower

For a £35,000 electric car in 2026/27 (4% BIK rate): the annual BIK value is £1,400. A 20% taxpayer pays £280 per year in income tax. A 40% taxpayer pays £560. Compare that with a similarly priced diesel car at 30% BIK: the annual BIK value is £10,500, costing a 20% taxpayer £2,100 per year.

Employer National Insurance on company car BIK follows the same ratio. The lower the BIK rate, the lower the employer's NI bill.

How the WCS grant interacts with capital allowances

When a business receives a Workplace Charging Scheme grant, capital allowances are calculated on the net cost actually paid, not the gross price. The grant is not treated as taxable income for most businesses (it reduces the capital expenditure base instead).

Example: a business installs 5 chargers at a gross cost of £6,000:

WCS grant: 5 sockets × £350 = £1,750
Net cost paid by business: £4,250
AIA deduction (at 25% corporation tax): £1,062.50
Total government contribution (grant + tax saving): £2,812.50
Effective cost to the business: £3,187.50 (53% of gross price)

The grant is received first (deducted from your invoice). The capital allowance saving comes when you file your corporation tax return for the year. Timing these correctly with your financial year is worth discussing with your accountant.

Worked example: a 10-socket workplace installation

A manufacturing business in Sheffield installs 10 × 7kW smart chargers in their staff car park. Here is how the numbers work:

Item	Amount
Gross installation cost (10 sockets × £1,500)	£15,000
WCS grant (10 sockets × £350)	−£3,500
Net cost paid by business	£11,500
AIA deduction (25% corporation tax on £11,500)	−£2,875
Effective net cost after grant and tax relief	£8,625
Government contribution (grant + tax saving)	£6,375 (43% of gross)

Over a 10-year asset life, the business also saves on mileage reimbursement costs (EVs are cheaper to run per mile than petrol/diesel), employer NI on lower BIK values for company car drivers, and potentially on fuel card administration.

Common questions

Yes, in most cases. EV chargers qualify as plant and machinery under the Annual Investment Allowance (AIA), which allows businesses to deduct up to £1 million of qualifying expenditure in the year of purchase. For most businesses installing workplace EV chargers, the full installation cost is deductible against taxable profit in year one. You should confirm the specific treatment with your accountant.

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