EV Company car - home charge payment and private use?
Discussion
Struggling to get a straight answer on this.
Car would be leased by the company. Company doesn't have a physical base in the UK so there's no "charging at work" option.
From a tax point-of-view - If we charge at home (or while out and about) can we expense the full cost of all charging, and then just repay private mileage at the current AER rate of 5p/mile?
Car would be leased by the company. Company doesn't have a physical base in the UK so there's no "charging at work" option.
From a tax point-of-view - If we charge at home (or while out and about) can we expense the full cost of all charging, and then just repay private mileage at the current AER rate of 5p/mile?
Sheepshanks said:
Struggling to get a straight answer on this.
Car would be leased by the company. Company doesn't have a physical base in the UK so there's no "charging at work" option.
From a tax point-of-view - If we charge at home (or while out and about) can we expense the full cost of all charging, and then just repay private mileage at the current AER rate of 5p/mile?
Simple questionaire tells youCar would be leased by the company. Company doesn't have a physical base in the UK so there's no "charging at work" option.
From a tax point-of-view - If we charge at home (or while out and about) can we expense the full cost of all charging, and then just repay private mileage at the current AER rate of 5p/mile?
https://www.gov.uk/expenses-and-benefits-electric-...
You'd need to do it the other way, you pay for charging and charge the company 5p a mile
Now if the company paid directly you might be able to get away with it (like workplace charging), so some companies pay for public charging directly rather than reimburse.
Hmm..thanks.
One of the lease companies says this:
"Company cars (business and private use): Electricity provided for company car drivers does not count as a Benefit-in-Kind if the journey is business use. Drivers can either pay up front for home and public charging and reclaim the costs, or the employer pays for everything and drivers log private mileage, and the energy costs are deducted from their salary.
If employers cover the cost of private mileage by paying for electricity home or public chargepoints, then this is classed as a Benefit-in-Kind."
Taking that at face value, our only concern was what it means by "energy costs are deducted from their salary". We thought maybe it meant pro-rata'd business and private use.
With petrol/diesel cars you can repay the private mileage at the AFR rate so isn't that possible with electric? That would mean the company paying for all the electric and the driver paying 5p mile for private use - but that means the driver is getting miles at about half price!
One of the lease companies says this:
"Company cars (business and private use): Electricity provided for company car drivers does not count as a Benefit-in-Kind if the journey is business use. Drivers can either pay up front for home and public charging and reclaim the costs, or the employer pays for everything and drivers log private mileage, and the energy costs are deducted from their salary.
If employers cover the cost of private mileage by paying for electricity home or public chargepoints, then this is classed as a Benefit-in-Kind."
Taking that at face value, our only concern was what it means by "energy costs are deducted from their salary". We thought maybe it meant pro-rata'd business and private use.
With petrol/diesel cars you can repay the private mileage at the AFR rate so isn't that possible with electric? That would mean the company paying for all the electric and the driver paying 5p mile for private use - but that means the driver is getting miles at about half price!
JD said:
In that situation the company pays for all fuel costs upfront.
How do you envisage the company paying for the charging of an electric car?
Out on the road it’s obviously straightforward. I would hope it could even be billed direct to the company.How do you envisage the company paying for the charging of an electric car?
At home, I assume the car itself or the charger app will record the amount of charging. If so, it would be easy enough to calculate the cost, then claim on expenses.
Unless I’m missing something?
My understanding is that it’s only tax free if the employer pays the electricity supplier direct and does not reimburse the employee for paying (I am an accountant but not a tax specialist) for anything above the 5p per mile.
It’s an absolute mess though as HMRC have scrambled to tax people wherever possible
It’s an absolute mess though as HMRC have scrambled to tax people wherever possible
We are able to expense any and all charging (personal and business) as part of our car scheme. We also have an Allstar EV card that can be used on some public chargers.
The long and short of the tax implications are that if you pay for it and reclaim, then the amount you reclaim is classed as income and will be subject to tax and NI.
If the company pays the bill directly then there is no tax.
So in my example it is cheapest for me to use my allstar card - as the bill is settled directly I pay no tax or NI. There is also no BIK for having the card, it is completely tax free.
Next would be expensing my home charging, followed by expensing public charging. Both of which are taxed as income.
I can also claim back 5ppm tax relief for any business mileage from HMRC as part of my tax return.
Regarding expensing home charging - we have to have “smart” chargers - these can provide a summary of charging and KWh used. This is submitted alongside a copy of you energy bill confirming your KWh rate.
For context - it’s a fortune 100 company, and took multiple conversations with one of the big 4 accounting firms for them to be able to work through the tax implications and ensure it is handled correctly!
Where it’s new there is a lot of misinformation and a lack of understanding primarily as HMRC don’t view electricity as a fuel. I’m sure more changes will happen but for now the government site is fairly clear and you can click through a few questions to understand your personal tax implications.
For me it still works out way cheaper!
The long and short of the tax implications are that if you pay for it and reclaim, then the amount you reclaim is classed as income and will be subject to tax and NI.
If the company pays the bill directly then there is no tax.
So in my example it is cheapest for me to use my allstar card - as the bill is settled directly I pay no tax or NI. There is also no BIK for having the card, it is completely tax free.
Next would be expensing my home charging, followed by expensing public charging. Both of which are taxed as income.
I can also claim back 5ppm tax relief for any business mileage from HMRC as part of my tax return.
Regarding expensing home charging - we have to have “smart” chargers - these can provide a summary of charging and KWh used. This is submitted alongside a copy of you energy bill confirming your KWh rate.
For context - it’s a fortune 100 company, and took multiple conversations with one of the big 4 accounting firms for them to be able to work through the tax implications and ensure it is handled correctly!
Where it’s new there is a lot of misinformation and a lack of understanding primarily as HMRC don’t view electricity as a fuel. I’m sure more changes will happen but for now the government site is fairly clear and you can click through a few questions to understand your personal tax implications.
For me it still works out way cheaper!
Edited by a7x88 on Thursday 11th August 08:06
Edited by a7x88 on Thursday 11th August 08:10
a7x88 said:
If the company pays the bill directly then there is no tax.
So in my example it is cheapest for me to use my allstar card - as the bill is settled directly I pay no tax or NI. There is also no BIK for having the card, it is completely tax free.
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Presumably charging on the road is way more expensive than at home, so that stance (if it's HMRC's) is somewhat ridiculous?So in my example it is cheapest for me to use my allstar card - as the bill is settled directly I pay no tax or NI. There is also no BIK for having the card, it is completely tax free.
]
a7x88 said:
I can also claim back 5ppm tax relief for any business mileage from HMRC as part of my tax return.
Is the car company owned / leased? I didn't think it would be possible to claim for elec and get biz miles, although for, say, 1K miles per month it's going to £20/mth in tax back at 40% so it's neither here nor there.a7x88 said:
For context - it’s a fortune 100 company, and took multiple conversations with one of the big 4 accounting firms for them to be able to work through the tax implications and ensure it is handled correctly!
We're finding it incredible that, bearing mind it must by now be a pretty common scenario, it's so difficult to get a straight answer.There's something wrong if refiunding home charging is taxable. If my maths is right then at 30p per kWh ad the car doing 3miles per kWh the driver would be paying 4p in tax per biz mile and getting 2p back in tax refund. So it's costing them money to use the car for work.
Charging on the road is the most expensive in pence per KW.
However - if charging with an Allstar card or some other method in which the employee is not responsible for paying the bill (and subsequently claiming it back) then it is the method which is cheapest to the employee as it attracts no Tax or NI. This is a HMRC policy.
See the link here and follow as per your situation - https://www.gov.uk/expenses-and-benefits-electric-...
Mine is a company car that is leased and fully paid for by the company
As per the government guide - whilst I pay tax on the bill expensed home charging I can claim tax relief on any business miles.
I agree the system isn’t great and it definately has its flaws especially if you do a lot of business miles. For me it works and is saving me cash but it may not for everyone and it will depend a lot on the specific company rules around charging and what you can/can’t claim for. If I couldn’t expense personal use it would be much tighter.
I think fundamentally HMRC haven’t caught up yet so changes are bound to happen.
However - if charging with an Allstar card or some other method in which the employee is not responsible for paying the bill (and subsequently claiming it back) then it is the method which is cheapest to the employee as it attracts no Tax or NI. This is a HMRC policy.
See the link here and follow as per your situation - https://www.gov.uk/expenses-and-benefits-electric-...
Mine is a company car that is leased and fully paid for by the company
As per the government guide - whilst I pay tax on the bill expensed home charging I can claim tax relief on any business miles.
I agree the system isn’t great and it definately has its flaws especially if you do a lot of business miles. For me it works and is saving me cash but it may not for everyone and it will depend a lot on the specific company rules around charging and what you can/can’t claim for. If I couldn’t expense personal use it would be much tighter.
I think fundamentally HMRC haven’t caught up yet so changes are bound to happen.
Edited by a7x88 on Thursday 11th August 22:51
The rules aren't complicated, they just seem illogical to you. I'd suggest the only reason why you're thinking you're not getting a straight answer is because you, or the people you're asking are struggling to accept the rules are right.
Rules often have unintended consequences. Free workplace charging has no taxable benefit and was introduced to encourage take up and to prevent a massive beaurocratic nightmare if companies provided it for their employees.
A consequence of the rules is Public charging with a charge card the employer provides and pays for directly is also free charging. Don't know whyt, probably an attempt at fairness as not all companies have car parks and may use a public car park with chargers they need to subcontract to.
Claiming back the cost retrospectively isn't however providing free charging, its reimbuirsing which is subtly different, and there's already a method for reimburesement and thats 5p per mile.
When the govenment catch up it almost certainly won't be to allow reimbursement, it will be to start removing some of the tax breaks. .
.
Rules often have unintended consequences. Free workplace charging has no taxable benefit and was introduced to encourage take up and to prevent a massive beaurocratic nightmare if companies provided it for their employees.
A consequence of the rules is Public charging with a charge card the employer provides and pays for directly is also free charging. Don't know whyt, probably an attempt at fairness as not all companies have car parks and may use a public car park with chargers they need to subcontract to.
Claiming back the cost retrospectively isn't however providing free charging, its reimbuirsing which is subtly different, and there's already a method for reimburesement and thats 5p per mile.
When the govenment catch up it almost certainly won't be to allow reimbursement, it will be to start removing some of the tax breaks. .
.
Sheepshanks said:
There's something wrong if refiunding home charging is taxable. If my maths is right then at 30p per kWh ad the car doing 3miles per kWh the driver would be paying 4p in tax per biz mile and getting 2p back in tax refund. So it's costing them money to use the car for work.
This is the exact situation at my employer.Business miles cost the employee.
Depending on annual mileage and business/personal split and how the car gets charged, a PHEV and fuel card is a cheaper prospect.
JD said:
Sheepshanks said:
There's something wrong if refiunding home charging is taxable. If my maths is right then at 30p per kWh ad the car doing 3miles per kWh the driver would be paying 4p in tax per biz mile and getting 2p back in tax refund. So it's costing them money to use the car for work.
This is the exact situation at my employer.Business miles cost the employee.
Depending on annual mileage and business/personal split and how the car gets charged, a PHEV and fuel card is a cheaper prospect.
My first Tesla was a company car and the approved rate was zero. I was responsible for all charging costs and 8 was doing 25k miles a year. A combination of free supercharging and plenty of free public charging meant it wasn’t that expensive, but like all things you do the maths. The issue is 5p a mile now doesn’t cover many people electricity cost, although if you’re in one of the fancy overnight charging tariff you’re paying something like 7p per kWh and 2p a mile making 3p on the 5p/ business mile.
People pay between nothing and 60p per kWh, how do you work out an appropriate amount? At least with petrol it’s between say £1.60 and £1.85 a litre. Even then, ICE owners are probably making a loss on every business mile
Take your virtually tax free car paid out of gross earnings and stop worrying about a business trip possibly costing you £5, while every personal trip saves you that or more compared to a petrol car.
a7x88 said:
However - if charging with an Allstar card or some other method in which the employee is not responsible for paying the bill (and subsequently claiming it back) then it is the method which is cheapest to the employee as it attracts no Tax or NI. This is a HMRC policy.
See the link here and follow as per your situation - https://www.gov.uk/expenses-and-benefits-electric-...
Mine is a company car that is leased and fully paid for by the company
As per the government guide - whilst I pay tax on the bill expensed home charging I can claim tax relief on any business miles.
I stumbled across AllStar's One Electric card https://www.allstarcard.co.uk/ev-solutions/?utm_so... which seems to have the ability to figure out your home charging costs, debit your employer and credit your home electric account. See the link here and follow as per your situation - https://www.gov.uk/expenses-and-benefits-electric-...
Mine is a company car that is leased and fully paid for by the company
As per the government guide - whilst I pay tax on the bill expensed home charging I can claim tax relief on any business miles.
On the face of it, sounds perfect! All your private mileage would be free. I guess it would be taking the mick to still claim the 5p as a tax allowance for business miles though.
Heres Johnny said:
Take your virtually tax free car paid out of gross earnings and stop worrying about a business trip possibly costing you £5, while every personal trip saves you that or more compared to a petrol car.
Can you fuel an electric car for less than 13p a mile, with a mix of home and public charging nowadays?As that’s a fixed personal miles cost for the petrol car.
Need to do a lot of personal miles to make up for the business ones.
Heres Johnny said:
Take your virtually tax free car paid out of gross earnings and stop worrying about a business trip possibly costing you £5, while every personal trip saves you that or more compared to a petrol car.
We currently run our own diesel cars, all cracking on a bit, which is why this has come up, and get the full 45/25p mileage allowance. We used to get £600/mth car allowance but that was rolled into salary some years ago and everyone is assuming that's untouchable!I think, if we go for this, however we do the maths. some of the guys are going to be unhappy that their tax-free £700/mth ish of mileage allowance suddenly disappears. If it turns out it's costing them money to use an EV for work they're going to be a bit more than unhappy!
Sheepshanks said:
I stumbled across AllStar's One Electric card https://www.allstarcard.co.uk/ev-solutions/?utm_so... which seems to have the ability to figure out your home charging costs, debit your employer and credit your home electric account.
On the face of it, sounds perfect! All your private mileage would be free. I guess it would be taking the mick to still claim the 5p as a tax allowance for business miles though.
We did look at this - and I raised it with our benefits teams. It’s a grey area and the advice we received was that although no money would pass through the employees hands as it is still the employee who is ultimately responsible for the electricity bill (I.e if the business for whatever reason didn’t pay - the employee would be expected to pay by the energy supplier) then it would still be subject to tax and NI.On the face of it, sounds perfect! All your private mileage would be free. I guess it would be taking the mick to still claim the 5p as a tax allowance for business miles though.
The Allstar one team also couldn’t provide any arguments to the contrary either so it was deemed to be of no benefit. Your company may take a different view though.
a7x88 said:
We did look at this - and I raised it with our benefits teams. It’s a grey area and the advice we received was that although no money would pass through the employees hands as it is still the employee who is ultimately responsible for the electricity bill (I.e if the business for whatever reason didn’t pay - the employee would be expected to pay by the energy supplier) then it would still be subject to tax and NI.
The Allstar one team also couldn’t provide any arguments to the contrary either so it was deemed to be of no benefit. Your company may take a different view though.
Unless HMRC have agreed to the operation then you're risking things. There was a big argument recently about VAT on public chargers, if I recall one company was charging 5% arguing it was domestic use, they lost. The Allstar one team also couldn’t provide any arguments to the contrary either so it was deemed to be of no benefit. Your company may take a different view though.
a7x88 said:
We did look at this - and I raised it with our benefits teams. It’s a grey area and the advice we received was that although no money would pass through the employees hands as it is still the employee who is ultimately responsible for the electricity bill (I.e if the business for whatever reason didn’t pay - the employee would be expected to pay by the energy supplier) then it would still be subject to tax and NI.
The Allstar one team also couldn’t provide any arguments to the contrary either so it was deemed to be of no benefit. Your company may take a different view though.
There's certainly "suggestions" on various websites that employees can reclaim, without BIK liability, the actual cost of home charging for business use, but then I don't see how that can work as you could claim all your home charging was business (assuming your business milage covered it) and all your public charging was private.The Allstar one team also couldn’t provide any arguments to the contrary either so it was deemed to be of no benefit. Your company may take a different view though.
I think our finance guy would be prepared to chance his arm on this if we tell him to, but we file our acccounts through a "proper" accountancy firm these days, so it might not get past them.
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