How to Buy an Electric Vehicle Through Your Limited Company (and Save Money)

Discover how buying an electric vehicle through your limited company can save you thousands in tax and running costs. Learn the key benefits and rules for 2025.

Why More Businesses Are Switching to Electric Vehicles

With rising fuel costs, climate commitments, and government incentives, more UK business owners are exploring electric vehicles (EVs) as a company car option. But did you know you can buy an EV through your limited company—and unlock significant tax savings?

Let’s break down the benefits and steps involved in making the switch.

🚗 Why Buy an EV Through Your Company?

1. Low Benefit-in-Kind (BiK) Tax
   
   

   • In 2025, the BiK rate for fully electric vehicles remains as low as 2%, compared to up to 37% for petrol/diesel vehicles.
     
     

   • This means minimal tax for directors and employees using EVs as company cars.
     
     

2. Corporation Tax Relief
   
   

   • Businesses can claim 100% first-year capital allowances on qualifying EVs.
     
     

   • That’s full tax relief on the car’s value in year one.
     
     

3. No Road Tax and Congestion Charges
   
   

   • EVs are exempt from Vehicle Excise Duty (VED) and ULEZ charges (at least for now).
     
     

4. Reduced Running Costs
   
   

   • Electricity is far cheaper than petrol or diesel.
     
     

   • EVs also have lower servicing and maintenance costs.
     
     

📋 What Are the Rules?

• The vehicle must be used for business purposes.
  
  

• You must report it as a company car on your P11D.
  
  

• For VAT-registered businesses, VAT recovery is possible—but only if there’s no personal use.
  
  

🔗 Want Expert Financial Advice?

For a detailed breakdown of the tax rules, check out this helpful article by Price Bailey:

👉 Buying an Electric Vehicle Through a Limited Company – Price Bailey

⚡ Ready to Go Electric?

At EEEVE, we make switching to electric seamless for business owners. Browse our carefully selected range of EVs, all with expert advice on business leasing, tax efficiency, and performance.

Whether you’re after a Tesla, Polestar, or Volkswagen ID series, we’re here to help you electrify your fleet the smart way.