In last year’s Autumn Statement, the Chancellor announced a new capital allowance for electric vehicle charging points. Capital allowances is the term used to describe the allowances which allow businesses to secure tax relief for certain capital expenditure. Most 'capital' items, such as computer equipment, vehicles, machinery etc, last for a lengthy period of time and the tax relief rules do not allow businesses to automatically deduct the full cost of such items in one go.

However, there are rules that allow businesses to claim a 100% first-year allowance (FYA) on the acquisition of certain qualifying Plant or Machinery. Examples of P&M that typically qualify for the 100% FYA include energy-saving equipment and environmentally beneficial plant. There are also FYAs available for qualifying cars with low CO2 emissions and for cars powered by natural gas, biogas and hydrogen.

The second Finance Act will introduce a new FYA for electric vehicle charging points. The measure will have effect for expenditure incurred on or after 23 November 2016 and will expire on 31 March 2019 for Corporation Tax and 5 April 2019 for Income Tax purposes.

Planning note

This measure is likely to see many businesses moving forward with plans to install electric vehicle recharging equipment over the next few years. It will also encourage the use of cleaner vehicles across the UK by helping to make more electric vehicle charging points available. Additionally, there are workplace grants available to businesses who install electric charge points for use of their employees.