EV fleet grants, tax incentives and funding in 2026: The complete UK business guide
EV fleet and chargepoint grants are government funding schemes designed to support the transition to electric vehicles by reducing the cost of both purchasing eligible EVs and installing charging infrastructure. Together, they help organisations lower the upfront investment required for fleet electrification and accelerate the move to cleaner transport.
While grant funding can help reduce upfront costs, it's only one part of the picture. Businesses can also benefit from tax reliefs, salary sacrifice schemes, lower running costs, company car incentives and charging infrastructure funding.
This guide brings together every major grant, subsidy, tax incentive and financial support mechanism available to UK organisations electrifying their fleets.
We regularly review this guide to reflect changes to government schemes, eligibility criteria and funding windows.
Contents:
1. Grants for electric vehicles
2. Grants for EV charging infrastructure
3. Tax incentives
4. Funding and finance options
Grants for electric vehicles
Electric Car Grant
What is the Electric Car Grant?
The Electric Car Grant helps reduce the upfront cost of eligible new battery electric cars. Funding’s available until 31 March 2030, with vehicles receiving different grant levels depending on their sustainability credentials.
Who can apply?
The grant’s available on eligible new battery electric cars priced at £37,000 or below. Both businesses and private buyers can benefit from the grant when purchasing a qualifying vehicle.
How much funding can you get?
Eligible vehicles are placed into one of two bands:
- Band 1: Up to £3,750
- Band 2: Up to £1,500
The banding depends on the vehicle's sustainability credentials.
What vehicles qualify?
To be eligible, vehicles must:
- Produce zero tailpipe emissions
- Include an 8-year/100,000-mile battery warranty
- Meet the government's sustainability requirements
How do you claim?
Participating manufacturers and dealers automatically apply the grant, reducing the vehicle's purchase price at the point of sale.
When does it close?
The scheme’s currently available until 31 March 2030.
Plug-in Van grant
What is the Plug-in Van grant?
The Plug-in Van Grant helps businesses reduce the upfront cost of purchasing eligible electric vans. The scheme has been extended throughout the 2026/27 financial year.
Who can apply?
The grant’s available on eligible new electric vans purchased through participating dealers.
How much funding can you get?
The amount available depends on the vehicle's weight:
- Small van (up to 2.5 tonnes GVW) 35% of the purchase price, up to £2,500
- Large van (2.5 to 4.25 tonnes GVW) 35% of the purchase price, up to £5,000
What vehicles qualify?
Eligible vehicles must:
- Be approved under the government's Plug-in Van Grant scheme
- Meet the relevant weight requirements
- Produce zero tailpipe emissions
How do you claim?
Participating manufacturers and dealers automatically apply the grant, reducing the vehicle's purchase price at the point of sale.
When does it close?
The grant has been extended throughout the 2026/27 financial year.
Other vehicles
What other vehicles are available for the Plug-in Grant?
Grants are also available for the following vehicle types:
- Wheelchair accessible vehicles
- Motorcycles
- Mopeds
- Taxis
- Small trucks
- Large trucks
Eligibility criteria and funding levels vary by vehicle type. Businesses should check the latest government guidance for a full list of eligible vehicles and grant values.
Grants for EV charging infrastructure
Workplace Charging Scheme
The Workplace Charging Scheme (WCS) is a government grant designed to help organisations reduce the cost of installing EV chargepoints. It can contribute towards both hardware and installation costs, making it one of the most widely used support schemes for workplace charging.
Who can apply?
The Workplace Charging Scheme is open to:
- Businesses
- Charities
- Public sector organisations
- Small accommodation businesses
Applicants must have dedicated off-street parking, and either own the property or have landlord permission to install charge points.
How much funding can you get?
Eligible organisations can receive:
- Up to £500 per socket
- Up to 75% of eligible costs
- Funding for up to 40 sockets across all sites
What costs are covered?
The grant can contribute towards:
- EV chargepoint hardware
- Installation costs
- Electrical work required as part of the installation
What’s excluded?
The grant doesn’t cover:
- Ongoing maintenance costs, or
- Electricity usage
Can multi-site businesses apply?
Yes. Businesses can claim funding across multiple locations, provided the total number of funded sockets doesn’t exceed 40 across all sites.
How do you claim?
Apply through the Workplace Charging Scheme application process. Once approved, applicants receive a voucher code, which an authorised installer redeems when the charge points are installed.
When does it close?
The closing date for the Workplace Charging Scheme is 31 March 2027.
Tax incentives
Low Benefit-in-Kind (BiK) rates for company cars
Electric vehicles continue to benefit from significantly lower Benefit-in-Kind (BiK) tax rates than petrol or diesel alternatives. For 2026/27, fully electric company cars attract a BiK rate of just 4%, making them one of the most tax-efficient company car options available. This can increase driver uptake, improve employee retention and support the introduction of salary sacrifice schemes.
Class 1A National Insurance savings
Lower BiK rates benefit more than employees. Because employer Class 1A National Insurance contributions are calculated based on a vehicle's taxable benefit value, businesses can also reduce their National Insurance liabilities by transitioning company car fleets to electric vehicles.
100% First-Year Allowance for chargepoints
Businesses investing in EV charging infrastructure can claim 100% First-Year Allowance (FYA) on qualifying expenditure. This lets businesses deduct the full cost of eligible charging equipment from taxable profits in the year of purchase, improving cash flow and shortening the payback period for infrastructure investments.
100% First-Year Allowance for zero-emission cars
Companies purchasing qualifying new zero-emission cars can also benefit from 100% First-Year Allowance. Instead of claiming tax relief over several years, businesses can deduct the full purchase cost against taxable profits in the first year, helping offset the initial investment required to electrify a fleet.
Salary sacrifice schemes
Salary sacrifice schemes can support fleet adoption without requiring organisations to fund a traditional company car benefit. Employees exchange a portion of their gross salary in return for an EV, often benefiting from favourable EV tax treatment and lower running costs. For employers, these schemes can help attract and retain talent while accelerating the transition to zero-emission transport.
Lower running costs and HMRC electricity rates
Electric vehicles typically cost less to fuel than their petrol or diesel equivalents, particularly when charging is managed effectively across workplace, depot or home charging locations. Businesses can also use HMRC's approved advisory electricity rates when reimbursing employees for business travel in company EVs, simplifying mileage claims and supporting lower operating costs.
Funding and finance options
Asset finance
Asset finance enables organisations to spread the cost of electric vehicles and charging infrastructure over an agreed period, rather than making a large upfront investment. This can reduce pressure on capital budgets while providing ownership of the asset at the end of the term. For many organisations, asset finance offers a predictable route to electrification while retaining long-term value in fleet and infrastructure assets.
Learn more about our financing options.
Leasing
Leasing provides access to EVs and charging infrastructure through fixed monthly payments over a defined contract period. It can help organisations manage cash flow, avoid significant upfront expenditure and deploy the vehicles and equipment needed to begin their transition sooner.
Learn more about our financing options.
Contract hire
Contract hire is a popular vehicle funding option that allows businesses to use vehicles for an agreed period before returning them at the end of the contract. Because ownership remains with the provider, organisations can often refresh their fleet more frequently and avoid concerns around vehicle resale values, helping to manage technology risk as the EV market continues to evolve.
Charging-as-a-Service (CaaS)
Charging-as-a-Service (CaaS) enables organisations to deploy EV charging infrastructure without significant upfront capital investment. Under a subscription-based model, the provider typically funds, installs, operates and maintains the charging solution, while the customer pays an ongoing fee. This can reduce both financial and operational risk, making it easier to scale charging infrastructure in line with fleet growth.
Fully-funded infrastructure models
Fully-funded infrastructure solutions can remove many of the financial barriers associated with charging deployment. Depending on the model, third-party investment may cover chargepoints, installation, grid upgrades and ongoing maintenance, with costs spread over time through an agreed payment structure. This approach can help organisations accelerate electrification programmes while preserving working capital for other strategic priorities.
Making EV fleet funding work for your business
In some cases, businesses can combine grants, tax reliefs and financing solutions to reduce the upfront cost of electrification. For example, an organisation may use the Workplace Charging Scheme to reduce installation costs, claim available tax reliefs on qualifying expenditure and finance the remaining investment through leasing or asset finance. Eligibility depends on the individual scheme and financing arrangement, so businesses should check the relevant funding terms before combining support.
Identifying the right combination of grants, tax incentives and funding solutions can significantly reduce the cost of fleet electrification. At Drax, we can help organisations assess available funding, build a charging strategy and identify the most cost-effective route to deployment.
Contact usDisclaimer
We’ve used all reasonable efforts to ensure that the content in this article is accurate, current, and complete at the date of publication. However, we make no express or implied representations or warranties regarding its accuracy, currency or completeness. We cannot accept any responsibility (to the extent permitted by law) for any loss arising directly or indirectly from the use of any content in this article, or any action taken in relying upon it.
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