Tax and Grants for EV Dealership in 2025

Electric vehicle (EV) sales in the UK are accelerating. 2025 offers new opportunities through targeted tax and grants for EV dealership schemes. At Apex Accountants, we work with EV dealerships across the country. We help them claim incentives, manage tax efficiently, and remain compliant. This article explains the key tax reliefs, funding options, and grants for EV dealerships in 2025. It also shares practical steps to help dealerships benefit fully.

Government Grants and Funding in 2025

The Plug-in Car Grant (PiCG) remains in place for 2025 but only covers approved low-emission models. The grant reduces the vehicle price for the customer, making sales easier for dealers. The current grant for qualifying cars is capped, and eligibility lists change regularly, so dealerships must check updates before quoting prices.

Dealerships can also benefit from the EV Chargepoint Grant, which helps cover the cost of installing electric vehicle chargers at business premises. This is especially valuable for dealers offering on-site charging for test drives and fleet preparation. Working with EV tax specialists ensures your business stays informed and maximises these opportunities.

Tax Reliefs for EV Dealerships

Dealerships purchasing zero-emission cars for business use may claim 100% first-year allowances under the Enhanced Capital Allowance (ECA) scheme. This means the full purchase cost can be deducted from taxable profits in the year of acquisition, creating a substantial tax saving.

VAT rules also help EV dealers. VAT can be reclaimed on qualifying zero-emission vehicles purchased for business purposes. This improves cash flow and reduces overall acquisition costs. Dealers selling used EVs to VAT-registered businesses may also apply the VAT margin scheme.

Employee and Fleet Tax Benefits

For dealerships that operate their own EV fleet or provide company cars to staff, Benefit-in-Kind (BiK) rates remain low compared with petrol or diesel models. From April 2025, the BiK rate for zero-emission vehicles increases from 2% to 3%. While still lower than petrol or diesel rates, dealerships should plan for the change with the help of EV tax specialists.

Environmental Compliance Advantages

Focusing on EV sales helps dealerships meet the UK’s Zero Emission Vehicle (ZEV) mandate, which requires a growing share of new car sales to be zero-emission. This also improves brand reputation and supports sustainability goals. Compliance often unlocks additional grants for EV dealerships linked to environmental performance and infrastructure investment.

How Apex Accountants Helps With Tax and Grants for EV Dealership

Apex Accountants provides sector-specific tax and grant advisory services for EV dealerships. Our specialists monitor all changes to EV tax rules, funding schemes, and compliance requirements. We help you identify eligible grants, claim the right tax reliefs, manage VAT effectively, and create financial plans that support growth in the EV market.

Contact Apex Accountants today to learn how your dealership can maximise tax savings and funding opportunities in 2025.