Electric vehicles offer a much wider range of charging opportunities than their petrol or diesel counterparts. But how do you claim for those expenses?
Although it’s often one of the biggest concerns for people considering an electric car, worries about charging tend to dissolve quickly once they’ve made the switch.
Ditching fuel station runs for topping up wherever you park – at home, at work, or on the road – can turn out to be a real perk once you get used to the change of routine. However, that mix of fuel sources means travel expenses get a little more complicated than claiming for a tank of petrol or diesel. Here’s what you need to know.
What can you claim for charging at home?
Most electric vehicle drivers charge overnight at home. It’s the most convenient way to top up, but a little challenging from an expenses perspective. After all, it’s hard to separate the electricity used to charge your car from the rest of your household consumption, let alone split that usage into business and private journeys.
As far as HMRC is concerned, electricity isn’t a fuel, but it does have a per-mile rate for drivers to claim back the cost of business trips in an electric car. The Advisory Electric Rate (AER) is currently set at 5p per mile, which is roughly in line with what you might expect to spend charging a typical mid-sized EV (like a Nissan Leaf) on a flat-rate home electricity tariff. So it should cover your costs.
The alternative can be complicated. HMRC treats reimbursed domestic electricity as a taxable Benefit-in-Kind, unless the vehicle is only available for business use. For a company car, where some journeys will be private, it’s up to employers to prove how the energy has been used.
Luckily, most new chargepoints can already record usage and share it via a built-in data connection. This means there are a few hardware-agnostic solutions to support more accurate reimbursement, without getting tied up in complex audits:
– Centrica’s ‘virtual fuel card’ is a single account for accessing home, workplace and public chargepoints. Home energy is then automatically reimbursed via payroll, but it’s designed for business-only vehicles (such as vans) and not for company cars.
– NewMotion’s solution is similar. It’s a card for accessing workplace and public chargepoints but also logs energy used at home and reimburses drivers in their pay package. However, drivers would need a separate account for private journeys.
– Mina and EQUANS (part of utility company Engie) are avoiding any up-front costs for drivers, by paying for home and public charge sessions then invoicing the employer for the energy used. Drivers can classify journeys as private within the same account, which Mina says creates enough of a paper trail to satisfy HMRC.
What can you claim for charging in public?
The AER doesn’t stack up quite so well if you’re using some of the faster public charging networks. According to the latest government data, the average cost of a kilowatt-hour of electricity is 17.4p at home, which compares to 69p at one of Ionity’s ultra-fast charge points. HMRC allows employers to adjust the AER if they can prove it’s leaving drivers out of pocket, but any excess is open to being taxed as additional income.
Suppliers have recognised that this is an issue. Several fuel card companies already let drivers pay for charging sessions and automatically invoice the costs back to their employer, just like a tank of petrol or diesel. Most charging providers will also provide VAT receipts or monthly statements showing how much you’ve spent, and some will automatically reimburse drivers as part of their wages. This can help take the hassle out of making a claim.
How about charging at work?
A unique perk of electric and plug-in hybrid cars is the potential to get free ‘fuel’ from your employer without being taxed on it. If your workplace has its own charge points, then HMRC doesn’t tax the electricity provided as a benefit in kind – even if it’s for private use and you’re a passenger in the car. Your employer might, however, charge you a small fee to cover their (usually very low) costs.
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