© Crown copyright 2018
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: firstname.lastname@example.org.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/first-year-allowance-for-electric-charge-points/first-year-allowance-for-electric-charge-points
Who is likely to be affected
Any business incurring qualifying expenditure on the acquisition of new and unused electric charge-points.
General description of the measure
The measure extends the current 100% first-year allowance (FYA) for expenditure incurred on electric charge-point equipment.
The allowance will expire on 31 March 2023 for Corporation Tax purposes and 5 April 2023 for Income Tax purposes.
The measure is designed to encourage the use of electric vehicles by supporting the development and installation of electric charging equipment of such vehicles. It will promote the use of cleaner vehicles by making electric charge-points a more common feature.
The measure complements the 100% FYA for expenditure on cars with low carbon dioxide emissions and 100% FYA for expenditure on zero-emission goods vehicles.
Background to the measure
This measure was first introduced on 23 November 2016 to support the transition in the UK to cleaner vehicles with zero or ultra-low emissions, which will improve air quality and make the UK a more environmentally friendly place.
The measure will have effect for expenditure incurred on or after 1 April 2019 for Corporation Tax and 6 April 2019 for Income Tax purposes. It will expire on 31 March 2023 for Corporation Tax and 5 April 2023 for Income Tax purposes.
Current law is contained in Section 45EA Capital Allowances Act 2001.
Legislation will be introduced in Finance Bill 2018-19 to extend the FYA for a further 4 years.
Summary of impacts
Exchequer impact (£m)
|2018 to 2019||2019 to 2020||2020 to 2021||2021 to 2022||2022 to 2023||2023 to 2024|
This measure is expected to have a negligible impact on the Exchequer.
This measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
The measure is not expected to impact on individuals or households as capital allowances can only be claimed in the course of business.
The measure is not expected to impact on family formation, stability or breakdown.
This measure does not impact on the equality of groups with protected characteristics.
Impact on business including civil society organisations
This measure is expected to have a negligible impact on businesses who incur expenditure on plant and machinery that qualifies for the scheme. Businesses will incur a negligible one-off cost for familiarisation with the new rules. It is not expected there will be any additional on-going costs.
It has not been possible to determine how many businesses use electric vehicles. However, the latest available information suggests that there were around 6,000 separate locations for electric charge-points in existence in September 2018.
Small and micro business assessment - this measure applies to all sizes of business, but in practice it impacts only on those businesses with qualifying plant and machinery expenditure above the level of the annual investment allowance of £200,000.
As a result there is expected to be an extremely limited impact on small firms, the vast majority of which incur less than £200,000 per annum on capital expenditure and who are unlikely to invest in this technology due to the costs of the equipment. Additionally there are separate workplace grants available for businesses who install electric charge points for use of their employees.
This measure will have no impact on civil society organisations.
Operational impact (£m) (HMRC or other)
There are no costs to HMRC for this measure.
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be kept under review through communication with affected groups.
If you have any questions about this change, contact Tunde Ojetola on Telephone: 03000 585 916 or email: email@example.com.