HMRC guidance now provides that a benefit in kind will not be suffered by an employee who uses a company-owned electric car for personal journeys and is reimbursed the cost of electricity consumed at home to charge the car by the employer. Employers will need to ensure that the reimbursement made for the cost of electricity relates solely to the company car. It is therefore recommended that records are kept showing the use of the charging point and related costs.
This update means that there is now parity between charging a company car at work and charging a company car at home.
If the cost of electricity is covered by the employer, then an employee should not also submit a claim for business mileage.
The VAT position has not changed and is still under review by HMRC. In summary, a business can recover input VAT on business use where cars are charged at work or at public charging premises. Mileage records will be needed to prove business use, otherwise output tax will need to be accounted for to HMRC on private use. Businesses cannot recover VAT on electricity consumed at an employee’s home.
If you have any queries regarding your electric company car and planning opportunities and would like assistance, please contact Karen Davies on 01633 653162 or karen.davies@kilsbywilliams.com.
Alternatively, please contact your usual advisor on 01633 810081 or email info@kilsbywilliams.com
