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Claiming tax reliefs for electric cars

First year allowances currently provide an incentive for businesses to replace existing cars with electric versions. Matt Brown, associate director at RSM, explains the tax breaks

For around 20 years, first year allowances (FYAs) have been available for low emission cars purchased for business use. The current rules enable tax relief to be claimed for 100% of the vehicle’s cost in the year of purchase.  However, only qualifying low emission or electrically propelled car purchases made on or before 31 March 2025 will qualify for FYAs.

Expenditure incurred on the provision of electric vehicle charging points also qualify for FYAs, but only before 5 April 2023 for income tax purposes (or 31 March 2023 for corporation tax purposes).

Businesses of all sizes can claim FYAs on a car provided that:

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