EV charging changes
Last week, HMRC clarified that the standard rate of VAT will apply to EV charging through charge points in public places. It has also explained when input tax can be recovered for charging EVs for business purposes.
More and more businesses are seeing the benefit in switching to EV. And, with many employees now charging their vehicles on the road, at home, and at the office, the use of EV charging points is becoming more common in public places.
HMRC has answered the requests from businesses to clarify the rules in specific cases, and in particular to confirm when input tax can be recovered when charging electric vehicles for business purposes.
The key information from this latest brief
- If employees charge an electric vehicle (which is used for business purposes) at home, you cannot recover the VAT. This is because the supply is made to the employee and not to the business.
- For employees that charge an employer's electric vehicle at the employer's premises; the employee needs to keep a record of their business and private mileage. The business can then work out the amounts of business use and private use for the vehicle. Businesses can recover VAT only on the business element. The usual input tax rules apply.
- HMRC’s policy on petrol and diesel is unchanged. It is still the case that VAT recovery is allowed when an employee fills up their car and is reimbursed by their employer.
HMRC says that it is possible to recover the input tax for charging an EV as an individual if all the following apply:
- You are a sole proprietor
- You charge your electric vehicle at home
- You charge your electric vehicle for business purposes
Any business, charity, or public sector organisation with a Companies House reference number can apply for the Workplace Charging Scheme, or WCS grant if they can declare a need for electric car charging equipment, or an intent to encourage EV use among their staff or fleet.
The WCS can provide financial support towards the up-front costs of buying and installing electric car chargers for many businesses, charities, and public sector organisations.