THE Department for Transport (DfT) has confirmed that the Plug-in Car Grant will continue in some form until at least the beginning of 2020.
The Plug-in Car Grant is provided by the Office for Low Emission Vehicles (OLEV) to encourage drivers into ultra-low emission vehicles.
However, the extension to the grant, which was announced towards the end of 2015, ends in March 2018.
It means a degree of confusion for businesses, company car drivers and consumers who order their qualifying vehicle post March 2018, with the potential loss of up to £4500 in the Plug-in Car Grant.
While there has been no official communiqué from the DfT, we contacted the Department for Transport for further clarification. A spokesperson said:
“The current grant rates will be maintained until at least the end of April 2018. We are conducting a review of PICG rates at present and will provide more information in due course.”
What are the current Plug-in Car Grants?
- Vehicles with a zero-emission range greater than 70 miles receive a grant of £4,500.
- Vehicles with a shorter zero-emission range will receive £2,500 provided they cost less than £60,000.
- There is 20% off the cost of an electric van, up to a maximum of £8000.
The grant was originally created in 2011. Its rates were revised for March 2016 and qualifying cars split into three categories.
Category 1 qualifying cars
These cars must be able to travel a minimum of 70 miles in zero emission mode and emit less than 50g/km of CO2. The grant available is 35% of the purchase price, capped at £4500.
Category 2 qualifying cars
These cars must be able to travel more than 10 miles in zero emission mode and emit less than 50g/km. The grant available is 35% of the purchase price capped at £2500. Cars with a retail price over £60,000 are not eligible for the grant.
Category 3 qualifying cars
These cars must be able to travel at least 20 miles in zero emission mode and have CO2 emissions of 50-75g/km. The grant available is 35% of the purchase price capped at £2500. Cars with a retail price over £60,000 are not eligible for the grant.
To qualify for the grant, vans must have emissions below 75g/km and the ability to travel in zero emission mode for at least 10 miles. The grant available is 20% of the purchase price capped at £8000.
How to apply for a Plug-in Car Grant
You don’t. The dealer will do the paperwork for you by including the value of the grant in the vehicle’s price. For businesses that are leasing their cars, the lease price will reflect the inclusion of the grant.
What about company car tax on a Plug-in Car Grant vehicle?
While the acquisition price of the car is reduced with the Plug-in Car Grant, this has no effect on company car tax.
Company car tax is based on the P11D value of the car.
Companies that lease a qualifying Plug-in Car Grant car also have to pay Class 1A NIC on the benefit. Again this is based on the P11D (not minus the grant) multiplied by the relevant BIK percentage rate and then multiplied by 13.8% to give the final Class 1A NIC due.
Which low emission cars are eligible for the Plug-in Car Grant?
The DfT has a full list of the qualifying cars. You can see them here: https://www.gov.uk/plug-in-car-van-grants/what-youll-get
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