Can I claim 100% tax relief on a new electric car?
A qualifying new and unused zero-emission car can receive a 100% first-year allowance. HMRC's current guidance covers purchases before April 2027. This is a separate allowance because cars do not qualify for AIA.
These answers provide general information, not advice tailored to your circumstances. Rules can change and exceptions may apply — speak to the CASS team before making a tax, accounting or financial decision.
Check that the car qualifies
HMRC allows a 100% first-year capital allowance for qualifying new and unused electric cars or cars with zero CO2 emissions bought before April 2027. This gives a deduction from taxable profits for the qualifying cost. It is separate from AIA, which excludes cars. A second-hand electric car does not qualify for this particular first-year allowance, although writing down allowances may be available. The ownership or finance arrangement and any private use also need checking. A company car can create a separate personal benefit charge for the driver. CASS can review the business deduction alongside the wider tax and cash implications before you buy.
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