As businesses and individuals become increasingly aware of the impact they’re having on the environment, the use of electric vehicles is becoming more common.

In light of this, HMRC has started to receive requests from organisations and business representatives asking to clarify the rules regarding:

  • If supplies of electric vehicle charging at charging points in public places should be charged at the reduced rate of VAT
  • When input tax can be recovered when charging electric vehicles for business purposes

HMRC has now issued a policy concerning the VAT treatment of the charging of electric vehicles when using charging points situated in various public places. It also explains when input tax can be recovered for charging electric vehicles for business purposes.

 

VAT liability for electric vehicle charging through charging points in public places

HMRC has confirmed that supplies of electric vehicle charging through charging points in public places are charged at the standard rate of VAT. There is no exemption or relief that reduces the rate of VAT charged.

 

Input tax

The brief also confirms that input tax can be recovered on electricity used to fuel a car intended for business use where:

  • The charging takes place at the business premises of the VAT-registered business
  • The charging is at the home of a sole proprietor

VAT cannot be recovered where the charging is at the home of an employee as the supply is then not made to the company

Where employees charge an employer’s electric vehicle (for both business and private use) at the employer’s premises, the employee needs to keep a record of their business and private mileage so that the employer can work out the amounts of business use and private use for the vehicle.

For further information about the Revenue and Customs Brief 7 (2021): VAT liability of charging of electric vehicles, please head to the gov.uk website.

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