eVED who pays the 3p/mile on business journeys?
Discussion
eVED – who pays the 3p/mile on business journeys in your own EV?
I’ve been looking at the proposed eVED mileage charge and think there may be a fairly significant issue for people who use their own EV for business mileage.
I own my EV and am the registered keeper. I also receive a taxable cash car allowance from my employer and do a reasonable amount of business mileage.
Like many car allowance schemes, my employer reimburses business mileage at broadly the HMRC company-car electric/fuel rates rather than the full AMAP mileage rate.
That’s not really been an issue with an EV because the mileage payment broadly deals with the electricity cost.
But eVED seems to change things.
As I understand it, eVED will be 3p/mile and the liability sits with the registered keeper.
So if I do a 200-mile business journey in my EV, that journey generates £6 of eVED which I personally have to pay.
My employer reimburses the electricity, but unless something changes there doesn’t appear to be any mechanism for them to reimburse the £6 eVED tax-free.
Compare that with somebody doing exactly the same journey in a company EV. The eVED liability sits with the registered keeper – company/leasing company etc – so ultimately it’s part of the cost of providing the company vehicle.
Same EV mileage and same business journey, but one potentially becomes a personal tax cost to the employee simply because they own the car.
I know the obvious answer is AMAP/Mileage Allowance Relief. As it’s my own car, I can potentially claim tax relief on the difference between my employer’s mileage payment and HMRC’s approved mileage amount.
But tax relief isn’t the same as reimbursement.
If I do 10,000 business miles, that’s £300 of eVED generated by work journeys which I personally have to pay. Mileage tax relief doesn’t simply give me that £300 back.
It seems the obvious solution would be for HMRC to allow employers to reimburse:electricity business mileage payment + 3p eVED for business miles with the eVED reimbursement being tax-free.
I’m interested in what other EV owners think.
Anyone else running their own EV with a cash car allowance and using it for significant business mileage? Has your employer considered what happens to the eVED on those miles?
And more importantly – have I missed something in the eVED proposals that already deals with this?
I’ve been looking at the proposed eVED mileage charge and think there may be a fairly significant issue for people who use their own EV for business mileage.
I own my EV and am the registered keeper. I also receive a taxable cash car allowance from my employer and do a reasonable amount of business mileage.
Like many car allowance schemes, my employer reimburses business mileage at broadly the HMRC company-car electric/fuel rates rather than the full AMAP mileage rate.
That’s not really been an issue with an EV because the mileage payment broadly deals with the electricity cost.
But eVED seems to change things.
As I understand it, eVED will be 3p/mile and the liability sits with the registered keeper.
So if I do a 200-mile business journey in my EV, that journey generates £6 of eVED which I personally have to pay.
My employer reimburses the electricity, but unless something changes there doesn’t appear to be any mechanism for them to reimburse the £6 eVED tax-free.
Compare that with somebody doing exactly the same journey in a company EV. The eVED liability sits with the registered keeper – company/leasing company etc – so ultimately it’s part of the cost of providing the company vehicle.
Same EV mileage and same business journey, but one potentially becomes a personal tax cost to the employee simply because they own the car.
I know the obvious answer is AMAP/Mileage Allowance Relief. As it’s my own car, I can potentially claim tax relief on the difference between my employer’s mileage payment and HMRC’s approved mileage amount.
But tax relief isn’t the same as reimbursement.
If I do 10,000 business miles, that’s £300 of eVED generated by work journeys which I personally have to pay. Mileage tax relief doesn’t simply give me that £300 back.
It seems the obvious solution would be for HMRC to allow employers to reimburse:electricity business mileage payment + 3p eVED for business miles with the eVED reimbursement being tax-free.
I’m interested in what other EV owners think.
Anyone else running their own EV with a cash car allowance and using it for significant business mileage? Has your employer considered what happens to the eVED on those miles?
And more importantly – have I missed something in the eVED proposals that already deals with this?
My employer pays a car allowance. Common in my industry but in reality it’s just income and taxed as such.
They pay as a result company car rates so 7p per mile for home charging and 15p for public charging. This is then paying the electric cost. They don’t pay both!
3p out of 7p is a hefty percentage.
They pay as a result company car rates so 7p per mile for home charging and 15p for public charging. This is then paying the electric cost. They don’t pay both!
3p out of 7p is a hefty percentage.
surveyor said:
My employer pays a car allowance. Common in my industry but in reality it s just income and taxed as such.
They pay as a result company car rates so 7p per mile for home charging and 15p for public charging. This is then paying the electric cost. They don t pay both!
3p out of 7p is a hefty percentage.
I am pretty sure your employer should be paying you the full amount so you should take it up with them.They pay as a result company car rates so 7p per mile for home charging and 15p for public charging. This is then paying the electric cost. They don t pay both!
3p out of 7p is a hefty percentage.
surveyor said:
As it s my own car, I can potentially claim tax relief on the difference between my employer s mileage payment and HMRC s approved mileage amount.
Never mind "potentially" - you're absolutely supposed to claim it. It's just gone up 55p too, so if you're a 40% tax payer then you're a penny up even after the extra 3p.surveyor said:
My employer pays a car allowance. Common in my industry but in reality it s just income and taxed as such.
They pay as a result company car rates so 7p per mile for home charging and 15p for public charging. This is then paying the electric cost. They don t pay both!
That makes sense. They pay as a result company car rates so 7p per mile for home charging and 15p for public charging. This is then paying the electric cost. They don t pay both!
I would assume that they’ll also pay the 3p at least for business mileage.
You're lucky, that with tax reclaim, you can overall still make a lot of money on business use.
Daughter commutes 15K/yr in her EV, so it's a straight £450 hit for her. With normal VED and a bit of private mileage she's going to be paying £750+/yr.
Her charging costs have pretty well doubled too - she got in at the beginning of Octopus Drive Pack so got it for £20/mth, but that's just finished.
Daughter commutes 15K/yr in her EV, so it's a straight £450 hit for her. With normal VED and a bit of private mileage she's going to be paying £750+/yr.
Her charging costs have pretty well doubled too - she got in at the beginning of Octopus Drive Pack so got it for £20/mth, but that's just finished.
To put it into context, EViD is being brought in as I understand it as the chancellor is losing out on tax income related to fuel. The company car mileage rate is designed to cover the cost of the fuel.
EVID is not a fixed cost like ved, which I would have to pay for my own use. It’s a variable charge like fuel and I’m surprised everyone expects it’s fine for an employee to pay personally for company miles.
EVID is not a fixed cost like ved, which I would have to pay for my own use. It’s a variable charge like fuel and I’m surprised everyone expects it’s fine for an employee to pay personally for company miles.
surveyor said:
55palfers said:
I used to take cash car allowance.
My employer didn't pay for the BED on my petrol car so I don't imagine eVED would be any different.
Can t work out what BED is? I assume they paid for your fuel in some form or other?My employer didn't pay for the BED on my petrol car so I don't imagine eVED would be any different.
Anyway, eVED is still 18mths away so maybe worry about it a bit nearer the time. I'm sure plenty of people will be kicking off about it.
I own my EV myself and get a cash allowance and business miles now reimbursed at 55p a mile. If I am not public charging my cost is 2p a mile in electricity. Even today I did 280 miles for work. I did an offpeak Tesla top up of 39kWh for £13 5 minutes from my destination. Including the home charge use down my cost for the day was around £15 and I will be claiming £155... Add £8.40 to this and I am sure I can get over it.
The whole point of the higher mileage rate for personal cars (although I am surprised they haven't given a separate EV rate yet) is that it also covers wear and tear, depreciation, insurance, tax, tyres, servicing etc so that you are technically not better off and then not a taxable benefit.
I have had my Renault 5 for 5 months and always tracked everything with my cars. I have driven 7.4k miles at a total cost of £208 including public charging. Public charging is 11% of my total kWh but 51% of the total cost. I have saved £1,488 in petrol against using our petrol cars and received in business mileage and car allowance (after tax) £2,519. With some man maths my entire car ownership will be "free." It's saving me so much I am not fussed by some additional tax when everything else about ownership is so low. It was always going to happen eventually that the gravy train would end.
Edit - gone back and read some of the other messages. Incredibly stingy from your employer paying company car bik allowance rates when it should be 55p a mile. That does change your numbers quite drastically and hence why my initial response was "does it really matter." I have never had to do it as my previous employers have always paid the full amounts, but I am fairly sure you can claim the difference back from HMRC. You will be down for hundreds if not thousands as your rate is so far off. I believe you have to submit dates and postcodes travelled to which I expect you could get from the claims you already do to work for your expenses.
The whole point of the higher mileage rate for personal cars (although I am surprised they haven't given a separate EV rate yet) is that it also covers wear and tear, depreciation, insurance, tax, tyres, servicing etc so that you are technically not better off and then not a taxable benefit.
I have had my Renault 5 for 5 months and always tracked everything with my cars. I have driven 7.4k miles at a total cost of £208 including public charging. Public charging is 11% of my total kWh but 51% of the total cost. I have saved £1,488 in petrol against using our petrol cars and received in business mileage and car allowance (after tax) £2,519. With some man maths my entire car ownership will be "free." It's saving me so much I am not fussed by some additional tax when everything else about ownership is so low. It was always going to happen eventually that the gravy train would end.
Edit - gone back and read some of the other messages. Incredibly stingy from your employer paying company car bik allowance rates when it should be 55p a mile. That does change your numbers quite drastically and hence why my initial response was "does it really matter." I have never had to do it as my previous employers have always paid the full amounts, but I am fairly sure you can claim the difference back from HMRC. You will be down for hundreds if not thousands as your rate is so far off. I believe you have to submit dates and postcodes travelled to which I expect you could get from the claims you already do to work for your expenses.
Edited by Goatwidcoat on Thursday 3rd September 17:30
If you're not already claiming the tax relief you should be!
10,000 miles per year at 55p/mile is £5,500
If they're paying you 7p per mile that's a tax deduction of £4,800.
Which is actual cash back to you of £960/£1,920 or more depending on marginal tax rates.
10,000 miles per year at 55p/mile is £5,500
If they're paying you 7p per mile that's a tax deduction of £4,800.
Which is actual cash back to you of £960/£1,920 or more depending on marginal tax rates.
Edited by blank on Thursday 3rd September 22:11
blank said:
If you're not already claiming the tax relief you should be!
10,000 miles per year at 5p/mile is £5,500
If they're paying you 7p per mile that's a tax deduction of £4,800.
Which is actual cash back to you of £960/£1,920 or more depending on marginal tax rates.
I was doing this for my previous car (actually HMRC just made an assumption year on year based on my previous car). Your right I need to look at this again…10,000 miles per year at 5p/mile is £5,500
If they're paying you 7p per mile that's a tax deduction of £4,800.
Which is actual cash back to you of £960/£1,920 or more depending on marginal tax rates.
Goatwidcoat said:
Edit - gone back and read some of the other messages. Incredibly stingy from your employer paying company car bik allowance rates when it should be 55p a mile. That does change your numbers quite drastically and hence why my initial response was "does it really
matter." I have never had to do it as my previous employers have always paid the full amounts,
.....
I suppose there are always edge cases and people who have unusually generous schemes, but it's absolutely standard for regular business users to get a monthly allowance and then get a per mile rate that basically just covers fuel. Plus the reclaimed tax up to the HMRC rate.matter." I have never had to do it as my previous employers have always paid the full amounts,
.....
Some years since I did it, but we got £650.mth plus 15p/mile (plus tax rebate). Was doing around 20K miles per year.
The way I think of it is that the HMRC rates went up 10p per mile in April, so still 7 p per mile better off even after the eVED kicks in. Just need to make sure you do at least a third of total mileage as business to be even.
You do need to make sure you’re getting the 55ppm amount one way or another though. I just invoice the full amount.
You do need to make sure you’re getting the 55ppm amount one way or another though. I just invoice the full amount.
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