You can claim capital allowances when you buy assets that you keep to use in your business, e.g. business vehicles such as cars, vans or lorries. If the asset qualifies for first year allowances, you can deduct the full cost from your profits before tax, thereby helping to reduce your annual tax bill.
The rate at which a company can ‘write down’ the value of company vehicles is based on its CO2 emissions. Electric and plug-in hybrid vehicles with CO2 emissions below 75 g/km are currently eligible for 100% write-down in the first year – so this includes nearly all electric and hybrid vehicles currently on the market. To qualify, the vehicle must be brand new and the purchase must be made before 31 March 2018.1
From April 2018, the CO2 threshold below which cars will be eligible for the 100% first year allowance will be reduced from 75g/km to 50g/km.1
* Please note that vehicles which have already received the plug-in van grant will not be eligible for enhanced capital allowances. Enhanced capital allowances are tax allowances that helps businesses to invest in energy-efficient products. HM Revenue and Custom (HMRC) has published further information on the application of enhanced capital allowances to low-carbon vehicles.
New from November 2016 until the end of March 2019, business installed EV charging points will now be eligible for Enhanced Capital Allowances (100% First Year write-down).