Revenue and Customs Brief 7 (2021) VAT liability of charging of electric vehicles
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Purpose of this brief
This brief explains HMRC’s policy concerning the VAT treatment
of charging of electric vehicles, when using charging points situated
in various public places.
In particular it clarifies that the standard rate of VAT applies to
supplies of electric vehicle charging through charging points in public
places. It also explains when input tax can be recovered for charging
electric vehicles for business purposes.
Who should read this
Suppliers who provide electricity through electric vehicle charging
points and motorists who charge up their vehicles for business purposes.
VAT liability background
The use of electric vehicle charging points is becoming more common
in public places. HMRC has received requests from businesses and
business representatives to clarify the rules in specific cases, and in
particular to confirm:
- 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’s policy
VAT
liability for electric vehicle charging through charging points in
public places
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.
The de minimis provision
There is a reduced rate of VAT for supplies of small quantities of
electricity, known as ‘de minimis’. The de minimis
provision only applies if the supply of electricity is all of the
following:
- ongoing
- to a person’s house or building
- less than 1,000 kilowatt hours a month
The de minimis provision does not apply to supplies of electric
vehicle charging at charging points in public places. This is because
these supplies are made at various places such as car parks, petrol
stations and on-street parking, not to a person’s house or
building. In addition, these supplies are not usually an ongoing supply
to one person where the rate of supply can be calculated.
You can recover the input tax for charging your electric vehicle if
all of the following apply:
- you are a sole proprietor
- you charge your electric vehicle at home
- you charge your electric vehicle for business purposes
You should work out how much of charging your electric vehicle is
for business use and how much is for private use. You can recover VAT
on only the business use amount. The usual input tax rules apply.
As a sole proprietor, you can recover the input tax for charging
your electric vehicle for business use at other places. The usual input
tax rules apply.
The rate for recovery of input tax for charging electric vehicles is
the same as the VAT rate charged on the supply of electricity.
Employees
charge an electric vehicle (which is used for business) at home
You cannot recover the VAT. This is because the supply is made to
the employee and not to the business.
Employees
charge an employer’s electric vehicle (for both business and
private use) at the employer’s premises
Your employee needs to keep a record of their business and private
mileage so that you can work out the amounts of business use and
private use for the vehicle.
You can recover the full amount of VAT for the supply of electricity
used to charge the electric vehicle. This includes the electricity for
private use. However, you will be liable for an output tax charge on
the amount for private use. This is because a ‘deemed
supply’ has been made. Alternatively, you can recover VAT on only
the business element. The usual input tax rules apply.
If you have any further questions about these changes, check VAT: general enquiries to find out how to
contact us.
About the Author
© Crown Copyright 2021.
A licence is needed to reproduce this article and has been republished
for educational / informational purposes only. Article reproduced by
permission of HM Revenue & Customs.
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Article Published/Sorted/Amended on Scopulus 2021-05-25 20:49:51 in Tax Articles
