Benefit-in-kind (or BIK) is a tax on employees who receive benefits in addition to their salary, including vehicles. In 2021 the BiK rate was reduced to zero for all-electric vans, encouraging businesses to switch to electric. This has a number of advantages: employees who use an electric van for personal mileage do not pay tax on the mileage, and the zero rating means employers also save money on National Insurance. Also, if you charge your electric van at your workplace, you won’t have to pay any BiK tax, even though it is a added benefit of being an employee.
Driving in London with an electric van could save you £3,915 a year on congestion charges, plus, if your current van does not meet the Ultra Low Emission Zone (ULEZ) standards (Euro 5 or older), you could save an additional £3,262.50 a year.
All 100% electric vans are exempt from the London Congestion Charge, and the Ultra Low Emission Zone (ULEZ) charge. Many other UK cities are introducing their own emission zones and limiting access to non-electric vehicles.
The rules for reclaiming VAT on an electric van are the same as for any other type of vehicle.
Electric vehicles government incentives and OZEV: What grants are available and how do they work?
You may remember that OZEV was previously called ‘OLEV’ – The Office for Zero Emission vehicles offer a range of grants for customers looking to switch to electric vehicles.
The range of incentives available are:
• The plug-in vehicle grant (PiVG) for ultra-low and zero emission vans
• Electric Vehicle Homecharge Scheme (EVHS)
• The Workplace Charging Scheme (WCS)
• The On-street Residential ChargePoint Scheme (ORCS).
Plug-in Vehicle Grant – applicable for electric vans
The plug-in vehicle grant can be claimed on electric vans, and is the main Government subsidy for supporting businesses that want to make the move to electric vehicles. Grant rates for the plug-in vehicle grant are currently £5,000 for large vans and £2,500 for small vans, with a limit of 1,000 per customer per year. The grant is very popular and plug-in van grant orders in 2021 were over 250% higher than in 2020, reflecting a growing momentum for electric commercial vehicles. eVito and eSprinter qualify as large vans.
You don’t have to do anything. The plug-in vehicle grant will be claimed by the Dealer on your behalf and deducted from the purchase price of the van.
Find out more about the plug-in vehicle grant for electric vans
Plug-in vehicle grant overview
The Electric Vehicle Homecharge Scheme (EVHS)
The EVHS scheme is designed to make switching to electric vehicles more affordable. Currently the grant is capped at £350 towards a home charger.
The EVHS is limited to people who live in flats and rental accommodation, as well as landlords.
The Workplace Charging Scheme (WCS)
The WCS grant supports businesses with the purchase and installation of charging points for their employees. It’s available to most businesses, charities and public bodies. The WCS reduces the cost of installing workplace charging points by up to £14,000 (£350 per point, up to 40 points).
Yes, the grant will be deducted from the total price, which will reduce your monthly payments. Simply speak to your preferred Mercedes-Benz Vans Dealer to find out more.
No. The grant will be claimed by your Dealer and deducted from the purchase price.
All information is correct at time of going to press – October 2023. Please note, Government grants and schemes and electricity prices can quickly change. Whilst every effort has been made to keep the page content as up to date and accurate as possible, please refer to the relevant Government sites for the latest information. Or speak to your preferred authorised Mercedes-Benz Dealer.