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The Government’s Winter Budget 2025, announced on 26 November, includes several major updates that affect how UK businesses operate and fund company cars, commercial vehicles, and electric fleets.
These updates will influence fleet planning from 2025 to 2030, particularly around:
Below is MW Vehicle Contracts’ detailed analysis of everything your business needs to know.
One of the biggest wins in Budget 2025 is the extension of the 100% First-Year Allowance (FYA) for:
The extension runs until March/April 2027, depending on tax type.
Why the First-Year Allowance matters to businesses
This allows organisations to deduct 100% of the purchase price of a qualifying electric vehicle from their taxable profits in year one.
This makes electric cars and vans some of the most tax-efficient assets a business can buy in 2025–2027.
Example
A business buying a £45,000 electric van can reduce taxable profits by the full £45,000 immediately — a major cash-flow and tax advantage.
A major announcement in the 2025 Budget is that Benefit-in-Kind (BIK) tax rates for electric and plug-in company cars will remain frozen until 2030.
Why this is important
Who benefits most
The Budget confirmed a new per-mile electric vehicle tax, starting April 2028:
What this means for fleets
While it introduces a new cost, the impact is usually modest:
Why EVs still make financial sense
Even with the mileage charge, EVs continue to offer:
Fuel duty remains frozen, giving businesses:
This is particularly relevant to:
The Budget signals a balanced, flexible approach to fleet planning.
With incentives like FYA and low BIK, EVs remain attractive for the right roles.
Ideal for:
Especially where:
Workplace and depot charging investment remains tax efficient until 2027.
Our expert view based on the Budget:
✔ Use the FYA EV window (2025–2027)
Take advantage of 100% tax-deductible EV assets.
✔ Re-evaluate your company car list
Electric cars are unbeatable for BIK savings until 2030.
✔ Conduct whole-life cost comparisons
EV mileage taxation must be balanced against savings elsewhere.
✔ Build a phased EV transition plan
Start with drivers and roles where EVs already work operationally.
✔ Use a blended fleet
Right vehicle, right job.
MWVC provides full fleet support including:
Our focus is to help you make smart, financially sound fleet decisions after the 2025 Budget.
For advice on how the 2025 Budget impacts your next vehicle or fleet strategy, speak to our team.
