HMRC corrects guidance on company-owned EV car charging
Occasionally, HMRC publishes guidance that is at odds with what the legislation says. A recent example of this is in respect of reimbursement for the costs of charging company-owned electric vehicles. What’s the full story?
The tax and NI rules surrounding wholly electric vehicles (EVs) are more generous than for other company cars. This treatment extends to reimbursement of costs incurred by an employee in charging the EV. However, until recently HMRC’s guidance stated that where an company-owned EV was available for private use, any reimbursement is taxable as earnings. But this is inconsistent with a specific exemption in the legislation. There is also currently no specific fuel benefit for EVs, as HMRC does not consider electricity a fuel.
HMRC’s guidance at EIM23900 has now been updated to make clear that “The exemption under s.239(2) ITEPA 2003 means there is no separate charge to tax under the benefits code where an employer reimburses an employee for the cost of electricity to charge their company car at home.” The NI position is the same. However, HMRC does state that employers must ensure that the reimbursement made towards the cost of the electricity is solely for the company car.
Related Topics
-
Review how much VAT charged on sales?
A recent Tribunal case ruled that HMRC’s logic was flawed in dealing with a “what is the supply” challenge. Does this mean you should check that you are charging VAT correctly on your sales if there could be doubt about what you are selling?
-
Are buy-to-let companies worth the hype?
There’s no doubt that landlords have been on the receiving end of multiple tax hikes in recent years. So called “property experts” will tell you that the best tax-saving strategy is to operate through a company. Are they right?
-
Electronic VAT return