The EV charge point installation grant – could it benefit your business?

With the use of electric vehicles on the rise, employers are going to be increasingly faced with the need to consider how both employees and any company fleet drivers will charge vehicles appropriately. Due to the business and low benefit in kind tax savings, now certainly seems to be a sensible time to consider transferring company fleets to electric vehicles.

Before committing to electric vehicle fleets, it is important to think about the practical steps that will need to be taken to ensure it will work efficiently for your business. For example, would you pay for a fleet driver to have a charge point installed at home or install them at your company premises? You will also need to decide if you will allow other employees to charge their own vehicles using the charge points provided.

WILL IT BE EXPENSIVE TO INSTALL THE CHARGE POINTS?

It can be, but there is help available with the use of the generous fleet and employee EV charge point installation grant, which has been recently launched by the government. For those with less than 250 employees, £4,250 is provided in grants to install five charge points, with a further £850 available for each additional charge point, up to a total of £15,000.

Multi-site companies can also claim grants of up to £15,000 for each site, across a maximum of 5 sites. This could mean the total grant available could be £75,000. We suggest talking through your individual situation with one of our expert advisers to find out the most financially efficient way you could make it work for your business.

HOW THE GRANT WORKS

To claim the grant, you will need to partner with an Office for Zero Emission (OZEV) approved installation company who will claim the grant on your behalf. We do have contacts that are able to handle the full installation and grant for you as one service. Generally, the steps below would be followed:

  • You must register with DVLA using the EV infrastructure grant for staff and fleets registration form
  • You agree work to be undertaken at a specific site with an OZEV approved installer
  • Once work is complete, your approved installer will apply for the grant on your behalf
  • Your installer will invoice you with a final invoice showing the total cost of installation (including any VAT charged)
  • DVLA will process the application and inform your installer of the result
  • If the grant is awarded, your installer will be paid the grant (which they will have already discounted from your bill)

Finally, it is worth noting that we expect the EV charge point installation grant to be very popular, therefore, if you are interested in taking advantage, we would recommend swift action to be taken.

GET IN TOUCH

If you would like to discuss any issues relating to the EV charge point installation grant and if it may be of benefit to your business, we would be happy to talk through your current situation and the options available to you. Get in touch by emailing enquiries@pmm.co.uk or calling 01254 679131.

A comment to note that the article does not constitute personalised advice and that advice should be sought before taking any action.

HMRC to review rules for claiming VAT on charging electric vehicles

Following the publication of Revenue and Customs Brief 7 (2021), HMRC have received a number of representations from businesses regarding the limited options for reclaiming VAT on the cost of charging electric vehicles.

HMRC have now confirmed that they are to review the situation, giving further consideration to the instance where an employee is reimbursed by the employer for the actual cost of electricity used in charging an electric vehicle for business purposes, as well as how to account for VAT on any private use.

The review will focus on:

  • evidence that will be required to enable an employer to claim the related VAT, where the employer reimburses an employee for the actual cost of electricity used in charging an electric vehicle for business purposes; and
  • potential simplification measures to reduce the administrative burden of accounting for VAT on private use.

Once the review is complete, HMRC will publish guidance to confirm the updated policy – we will keep you updated on this as it occurs.

What are the current rules on claiming VAT when charging an electric vehicle for business purposes?

HMRC have recently updated section 8 of VAT Notice 700/64 (Motoring Expenses) which covers the recovery of input tax incurred by businesses regarding the charging of electric cars.

VAT liability of charging an electric vehicle

  • The supply of electric vehicle charging via a charging point in a public place is subject to VAT at the standard (20%) rate.
  • The reduced (5%) rate of VAT only applies to ongoing supplies of electricity to a person’s house or building which is less than 1,000 kilowatt-hours a month.

If you are a sole proprietor, or partner in a partnership business, the VAT incurred on charging an electric vehicle can be recovered if you:

  • charge your electric vehicle at home or elsewhere
  • charge your electric vehicle for business purposes

The rate of VAT incurred will vary according to whether you were at home or not.

Employees are currently able to claim back VAT for charging an electric vehicle in the following instances:

  • where an employee’s electric car (whether it is a company vehicle or not) is charged at a public charging point
  • where employees charge an employer’s electric vehicle used for both business and private purposes at the employer’s premises

In both instances, the employee must keep records of their business/private mileage to determine the proportion of business use for their vehicle.

Where an employee charges an electric vehicle at home, whether this is a company vehicle or not, the overall supply of electricity is made to the employee and not the employer, and therefore the VAT cannot be reclaimed.

Get in touch

The review of these complicated VAT regulations on the charging of electric vehicles is welcomed – we will keep you updated on the outcome when published by HMRC. If you have any questions regarding reclaiming VAT on electric vehicle charging, get in touch by speaking to your usual adviser, or by emailing enquiries@pmm.co.uk.