What is the 100% first-year allowance for electric vehicle charging points under section 45EA?

Section 45EA of the Capital Allowances Act 2001 provides a 100% first-year allowance for capital expenditure on new plant or machinery installed solely for charging electric vehicles. This allows businesses to deduct the entire cost from taxable profits in the year the expenditure is incurred, rather than writing it down over several years.

What is the qualifying period for the electric vehicle charging point allowance?

The qualifying period runs from 23 November 2016 to 31 March 2026 for corporation tax payers, or 5 April 2026 for income tax payers. The Treasury has the power to extend this period by regulations, and the deadline has already been extended on several occasions since the relief was first introduced.

Do hybrid vehicle charging points qualify for the first-year allowance under section 45EA?

Yes. An electric vehicle is defined broadly as any road vehicle capable of being propelled by electrical power, whether or not it can also be propelled by another form of power. This means charging points for hybrid vehicles qualify for the 100% first-year allowance, not just those serving fully electric vehicles.

What conditions must be met for expenditure to qualify under section 45EA?

Three conditions must be met. The expenditure must be incurred during the relevant qualifying period. The plant or machinery must be new, meaning unused and not second-hand. Finally, the expenditure must not fall within any of the general exclusions set out in section 46 of the Capital Allowances Act 2001.

Capital Allowances Act 2001 section 45EA

Expenditure on plant or machinery for electric vehicle charging point

Section 45EA provides a 100% first-year allowance for capital expenditure on new plant or machinery installed solely for the purpose of charging electric vehicles, where the expenditure is incurred within a specified time window.

Expenditure on new (unused, not second-hand) plant or machinery installed solely for charging electric vehicles qualifies for a 100% first-year allowance.
The qualifying period runs from 23 November 2016 to 31 March 2026 for corporation tax payers, or 5 April 2026 for income tax payers.
An electric vehicle is defined as any road vehicle capable of being propelled by electrical power, including hybrid vehicles.
The Treasury has the power to extend the qualifying period by regulations, and general exclusions under section 46 apply.

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