HMRC clarify the VAT treatment on charging electric vehicles
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With the rise of electric vehicles, the use of public EV charging points is becoming much more common. HMRC has recently clarified their rules on VAT and input tax recovery with regards to charging electric vehicles.
It has been reiterated that electric vehicle charging through public charging points are charged at the standard rate of VAT. There are no exemptions that reduce the rate of VAT charged.
However, there is a reduced rate of VAT for supplies of small quantities of electricity. This is known as ‘de minimis’ and will only apply if the electricity supply is ongoing, to a person’s house or building and is less than 1,000-kilowatt-hours a month.
The de minimis provision does not apply to electric vehicle charging at a public charge point because the electricity supply is not to a person’s house.
Recovering Input Tax
You can also recover the input tax for charging your EV if you are a sole proprietor, you charge your electric vehicle at home and you charge your electric vehicle for business purposes.
By calculating how much your electric vehicle charging is for private and business use you can then recover VAT on only the business amount – usual input tax rules apply.
If an employee charges an electric vehicle, that is used for business, at home, then they cannot recover the VAT because the supply is made to the employee and not to the business.
For more information regarding the VAT treatment for charging electric vehicles, click here to see the official HMRC page