If your company installs electric vehicle charging points in 2025/26, the tax treatment depends on who uses them and where they are installed. The headline is this: most charging points qualify for 100% capital allowances in the year of purchase, giving you full tax relief immediately rather than spreading it over several years. But the specific relief available changes depending on whether you are a limited company or an unincorporated business, and whether you install the charger for staff, customers, or as part of a new build.
As ICAEW qualified accountants, we work with UK businesses across every sector. We see a lot of confusion around the different capital allowance regimes that apply to EV charging equipment. This article cuts through that confusion and gives you the specific rules for 2025/26.
What Are Enhanced Capital Allowances for EV Charging Points?
Enhanced capital allowances is a broad term covering several reliefs that let you write off 100% of the cost of qualifying plant and machinery against your taxable profits in the year you buy it. For EV charging points, the relevant reliefs are:
- Full expensing for limited companies on most new plant and machinery, including EV chargers.
- 100% first year allowances (FYA) for certain environmentally beneficial equipment, including electric vehicle charging points.
- Annual Investment Allowance (AIA) at £1,000,000 per year, which also covers chargers but is not limited to them.
The key distinction for 2025/26 is that full expensing and the 100% FYA both give you immediate relief. The difference is that full expensing is a general relief for limited companies, while the 100% FYA is a specific relief that also applies to unincorporated businesses (sole traders and partnerships) for designated environmentally beneficial technologies.
Do EV Charging Points Qualify for Full Expensing in 2025/26?
Yes. Full expensing allows limited companies to claim a 100% deduction on most new main-rate plant and machinery assets. Electric vehicle charging points fall squarely within this category. If your company buys a new charger, installs it, and puts it into use for your business, you can deduct the full cost from your taxable profits in the same accounting period.
There is no upper limit on full expensing. If you spend £50,000 on charging points for your office car park, you deduct £50,000. If you spend £500,000, you deduct £500,000. The relief is uncapped.
There is one important condition: the charging point must be new and unused. Second-hand chargers do not qualify for full expensing. They would instead attract writing down allowances at 18% per year on a reducing balance basis.
Can Sole Traders and Partnerships Claim 100% Relief on EV Chargers?
Unincorporated businesses cannot use full expensing. That relief is limited to companies. But sole traders and partnerships can claim a 100% first year allowance for electric vehicle charging points under the environmentally beneficial equipment rules.
The 100% FYA for EV charging points is available to all businesses, regardless of legal structure. If you are a sole trader running a plumbing business from home and you install a charger for your electric van, you can claim the full cost against your self-employed profits in the year of purchase.
The same conditions apply: the charger must be new, and it must be used for your business. A charger installed at your home for personal use alongside business use is still eligible, provided the business use is genuine. If you use it 60% for business and 40% for personal, you claim 60% of the cost.
What About Chargers Installed for Customers or the Public?
This is where the rules get more specific. If your company installs charging points primarily for use by customers, visitors, or the general public, the same capital allowance reliefs apply. A hotel installing chargers in its car park for guests can claim full expensing. A retail park installing public chargers can claim full expensing. A tradesperson installing a charger at their workshop for their own fleet can claim full expensing.
The key test is whether the charger is used for the purposes of the trade. If it supports your business activity, it qualifies. There is no rule that says the charger must be used exclusively by employees.
However, if you are a property developer installing chargers as part of a new residential development and selling the properties, the chargers may form part of the capital cost of the development rather than qualifying for separate capital allowances. In that case, the cost goes into your trading stock or capitalised building cost, and you recover it through the sale rather than through capital allowances. Speak to your accountant about the specific treatment if you are in this position.
Enhanced Capital Allowances EV Charging Points: The Specific Legislation
The 100% first year allowance for electric vehicle charging points is provided under the Capital Allowances Act 2001, Part 2A, which designates certain technologies as environmentally beneficial. The relief was originally time-limited and has been extended several times. For 2025/26, the relief remains in place. HMRC has confirmed that charging points installed on or before 31 March 2025 (for corporation tax) or 5 April 2025 (for income tax) qualify for the 100% FYA under the current rules.
For accounting periods ending after those dates, the position depends on any further government announcements. The Spring Budget 2025 extended the relief for a further two years, so charging points installed up to 31 March 2027 (corporation tax) and 5 April 2027 (income tax) should continue to qualify. We will update this guidance if anything changes.
What Costs Can You Include in the Claim?
When you install a charging point, the cost is not just the unit itself. You can also claim capital allowances on:
- The charger unit and its mounting post or wall bracket.
- Cabling, wiring, and electrical connection work. >Groundworks, ducting, and trenching.
- Installation labour directly related to the charger.
You cannot claim on the cost of the car itself, obviously. But if you buy an electric vehicle and a charger at the same time, both can qualify for 100% relief. The car qualifies for full expensing if it is new and has zero CO2 emissions. The charger qualifies as a separate asset.
One practical point: if your electrician invoices you a single amount covering the charger plus installation, that is fine. The whole amount is capital expenditure on plant and machinery. Just keep the invoice and a note of what it covers.
Can You Claim If You Lease the Charging Point?
Leased charging points are different. If you lease a charger under an operating lease, you do not own the asset and cannot claim capital allowances. Instead, the lease payments are deductible as revenue expenses against your profits. If you lease under a finance lease (hire purchase), you may be able to claim capital allowances on the capital element of the payments.
Most businesses buying charging points outright or financing them through a straightforward purchase will use the capital allowance route. If you are considering a lease, check the terms carefully. Some suppliers offer "free" charger installation in exchange for a monthly subscription fee. In that case, you pay the subscription and claim it as a revenue expense. You get no capital allowance because you do not own the charger.
Practical Example: A Manchester-Based Consultancy
Let us put this into a real scenario. A software consultancy in Manchester's Northern Quarter has five employees. The company buys and installs three EV charging points in its dedicated office car park at a total cost of £7,200 including installation. All three chargers are new.
The company is a limited liability company. It claims full expensing on the full £7,200 in the year of purchase. Its corporation tax bill reduces by 19% (assuming profits under £50,000) or 25% (if profits exceed £250,000). At 19%, the tax saving is £1,368. At 25%, the saving is £1,800.
If the same company were a sole trader or partnership, it would claim the 100% FYA instead. The tax saving depends on the owner's income tax rate. A basic rate taxpayer saves 20% of £7,200 (£1,440). A higher rate taxpayer saves 40% (£2,880).
What If You Install Chargers at Your Home as a Director?
If you are a director and you install a charger at your home for charging your company electric car, the position is slightly different. The charger is a capital asset. If the company pays for it, the company can claim capital allowances on it, provided the charger is used for business purposes. The charger must be owned by the company, not by you personally.
If you pay for the charger personally and the company reimburses you, the company can still claim capital allowances on the reimbursement. The key is that the company must bear the cost and own the asset. If you buy the charger personally and the company does not reimburse you, the company cannot claim anything, and you as an individual cannot claim capital allowances against your employment income.
This area often intersects with the director pay and dividends planning, particularly if the company also provides you with a company electric car. The benefit in kind on electric cars is very low for 2025/26 (2% of list price), so the combination of a company car and a home charger can be highly tax efficient. But the charger itself must be correctly structured as a company asset.
Record Keeping and Compliance
To claim enhanced capital allowances for EV charging points, you need to keep:
- The purchase invoice showing the charger model and cost.
- Evidence of installation (an electrician's invoice or a photo of the installed unit).
- A note of the date it was brought into use.
- A record of the business use percentage if the charger is used partly privately.
You do not need to submit a separate form to HMRC. The claim is made through your corporation tax return (CT600) or self assessment return (SA100 with SA103 or SA800). You include the cost in the capital allowances computation, typically in the "plant and machinery" pool. Your accountant will handle this as part of your annual accounts preparation.
If your company is new and you have not yet filed its first return, make sure you register the charger as a fixed asset in your bookkeeping and accounting records from day one. Software like Xero or FreeAgent handles this easily.
What About VAT on EV Charging Points?
VAT on the purchase and installation of charging points is generally recoverable if your company is VAT registered and the charger is used for business purposes. If the charger is used for private use by employees or directors, you may need to account for a VAT adjustment on the private use element. This is a separate issue from the capital allowance claim, but it is worth discussing with your accountant when you set up the charger.
If you are not VAT registered because your turnover is below the £90,000 threshold, you cannot recover the VAT. The VAT becomes part of the capital cost on which you claim capital allowances. That is fine. The capital allowance claim includes the VAT-inclusive cost.
Is There Any Reason Not to Claim Full Expensing?
In almost all cases, claiming 100% relief in the year of purchase is the best option. It gives you the maximum tax benefit as early as possible. However, there are two scenarios where you might prefer not to claim full expensing:
- If your company is loss-making. Claiming full expensing increases the loss, which you can carry forward against future profits. But if you are unlikely to have taxable profits in the near future, the immediate relief is worthless. In that case, you might elect to defer the claim and use writing down allowances later, when you have profits to offset. This is unusual but possible.
- If you want to spread the relief for cash flow reasons. This is rare, but a company with very low profits might prefer to claim capital allowances gradually to avoid wasting the personal allowance or basic rate band on salary. In practice, most companies claim the full relief immediately.
Your accountant can run the numbers for your specific situation. As a rule of thumb, if your company is profitable, claim full expensing.
Final Thoughts on Enhanced Capital Allowances for EV Charging Points
The tax treatment of EV charging points is straightforward for most businesses. If you buy a new charger and use it for your trade, you get 100% relief in the year of purchase. Limited companies use full expensing. Unincorporated businesses use the 100% first year allowance. Both give the same result: full deduction in year one.
The relief is not time-limited in the way some green incentives have been. The government has extended it consistently, and the current extension runs to 2027. If you are planning to install chargers, there is no reason to wait. The tax benefit is available now.
If you are unsure whether your specific installation qualifies, or if you are installing chargers as part of a larger property development, get in touch with our team. We can review your plans and confirm the correct capital allowance treatment.
For more on how capital allowances interact with other tax reliefs, read our guide to corporation tax planning or our overview of limited company tax.