VAT and charging electric vehicles

In May 2021, HMRC published a brief note concerning the VAT treatment of using charging points in public spaces for electric cars.

The cost of using these charging points is always standard-rated, while charging your vehicle at home, using a domestic supply, is usually at the reduced-rate of 5%.

The Gerald Edelman VAT team have had several queries regarding whether input tax can be recovered on these charges.

So, can you recover input tax for charging electric vehicles?

Yes, in the following circumstances:

• You are a sole proprietor and charge your electric vehicle at home for business purposes. You can only recover VAT on the business amount so you will need to calculate how much business use you make of the car.
• Your employee charges your vehicle, used for both business and private use, at your premises, but you must keep a record of the business and private use of the vehicle. You can claim VAT on the full amount of the electricity but pay output tax for the private use element. Many companies will already reclaim the input tax on any utility bills – they may just be higher than previously or have a separate metered supply for charging points.
• Subject to the usual input tax rules, input tax can be reclaimed on any VAT incurred when using public charging points. If a company reimburses the cost to an employee for charging their vehicle, it can recover the VAT in the same way that it would if the employee filled up with petrol/diesel.
  However, a business cannot reclaim any input tax if an employee charges a vehicle, which is used for business, at home.

HMRC has also published an advisory mileage rate of £0.04 per mile for the ‘fuel’ element electric vehicles and, depending on where they have been charged the recovery could be at 1/6 of every £0.04 or 1/26 if it is charged at home.

This business brief only covers some of the issues in relation to VAT and the use of public electric charging points, we hope further information will be published in due course.

Last updated: 20.12.2024