EV general discussion

[john_smith]

Will come down to company policy

HMRC says:



So basically no guidance from HMRC, it will be between you and employer to come up with an acceptable means of working out the cost of the electric used by the employee to charge the car.
Whilst excluding electricity from the definition of fuel can cause administrative problems regarding the reimbursement of business mileage, there are some benefits. In particular, s149(4) ITEPA 2003 extends the exclusion from the car fuel charge to any ‘facility or means for supplying electrical energy’. This means that an employer can, for example, pay for the following without a taxable benefit arising:

• A vehicle charging point to be installed at the employee’s home.
• A charge card to allow individuals access to commercial or local authority charging points.

Risk with a flat rate charge like 18p per kW charged like Russinating suggested is that if that is more than the employees cost then the employee may be subject to tax on the extra. Conversely if it isnt enough, although the employee will be able to claim tax relief on the difference they will still be out of pocket.

Great info, thank you.

I have a home charger that has an app and logging.

I think what I’ll do is record how much KW is used each month and record it. As for what I can claim for each unit….what a minefield!

 

[lordrobs]

Will come down to company policy

HMRC says:



So basically no guidance from HMRC, it will be between you and employer to come up with an acceptable means of working out the cost of the electric used by the employee to charge the car.
Whilst excluding electricity from the definition of fuel can cause administrative problems regarding the reimbursement of business mileage, there are some benefits. In particular, s149(4) ITEPA 2003 extends the exclusion from the car fuel charge to any ‘facility or means for supplying electrical energy’. This means that an employer can, for example, pay for the following without a taxable benefit arising:

• A vehicle charging point to be installed at the employee’s home.
• A charge card to allow individuals access to commercial or local authority charging points.

Risk with a flat rate charge like 18p per kW charged like Russinating suggested is that if that is more than the employees cost then the employee may be subject to tax on the extra. Conversely if it isnt enough, although the employee will be able to claim tax relief on the difference they will still be out of pocket.

Its quite funny really, the benefit for company car drivers in terms of BIK is huge with EV yet at the same time for people who do high business miles the 'fuel' rates are a mess! Can't claim for miles done on charge obtained at home at the AFR (though, realistically, how would they ever know?) and that same flat advisory rate isn't actually enough to cover the cost of public charging at 5 pence per mile.

 

[Journey]

It's advisory, not compulsory, so I'd think many people will get a rate that matches their costs.

 

[teenwolf]

When the EV does catch on there will be cars piled up stranded out of electric. Motorways will be chaos

 

[lordrobs]

It's advisory, not compulsory, so I'd think many people will get a rate that matches their costs.

Which then requires absolute proof of cost and reimbursement to that amount and no more, otherwise Tax and NIC come into play.

I doubt many employers want to go down that road with the additional admin involved.

 

[peige]

When the EV does catch on there will be cars piled up stranded out of electric. Motorways will be chaos

What are you talking about? In the same way as cars running out of fuel litter the roads?
Actually the motorway network is easier to transit in a BEV as most every service stop has a charger. Granted worse case is that you arrive and its broken but the network is getting better all the time.

 

[jpaul]

hmm - had read apparently public charger ratio is not keeping up with ownership, I don't know if Boris's cop net zero strategy doc contradicts that
https://thedriven.io/2021/12/09/uk-...t-competition-for-charging-spots-intensifies/

According to a new SMMT analysis, the number of plug-in vehicles potentially sharing a public on-street charger has weakened from 11 to 16 between 2019 and 2020, and only one standard on-street public charger is installed for every 52 new plug-in cars registered over the course of 2021.

Britain’s ratio of plug-in vehicles on the road to standard public chargers of 16:1 is one of the worst among the top 10 global EV markets at the end of 2020.

e:yes they should analyse better charge rates available

 

[Jez]

Which then requires absolute proof of cost and reimbursement to that amount and no more, otherwise Tax and NIC come into play.

I doubt many employers want to go down that road with the additional admin involved.

Confused by your posts, the tax free allowance per mile from HMRC is 45ppm up to 10k business miles, and 25ppm thereafter - for any car. There is no exclusion for electrics that i can see? Tax and NIC wouldn't get anywhere near a fair reimbursement rate?

The advisory rates are just that - purely advisory - the actual tax free limits are the 45/25 rates.

 

[Kenai]

Confused by your posts, the tax free allowance per mile from HMRC is 45ppm up to 10k business miles, and 25ppm thereafter - for any car.

For any private car, not a company pool car.

 

[Jez]

For any private car, not a company pool car.

This doesnt matter does it?

While i thought that we are generally talking about a car either assigned to you, or used by you for company business whether owned by you or the company, the 45/25ppm rates apply all round do they not?

(Not a situation that i have ever been in actually, i have done hundreds of k of business miles but i suppose have always used my own cars).

 

[Kenai]

This doesnt matter does it?

While i thought that we are generally talking about a car either assigned to you, or used by you for company business whether owned by you or the company, the 45/25ppm rates apply all round do they not?

(Not a situation that i have ever been in actually, i have done hundreds of k of business miles but i suppose have always used my own cars).

I've never understood the 45/25 rates to apply to anything other than private vehicles.

When you look at the company car advisory rates, it even talks about any excess payment beyond those advisory rates being taxable if additional cost can't be demonstrated.

If you pay rates that are higher than the advisory rates but cannot show the fuel cost per mile is higher, there will be no fuel benefit charge if the mileage payments are only for business travel. Instead, you’ll have to treat any excess as taxable profit and as earnings for Class 1 National Insurance purposes.

 

[Jez]

If you pay rates that are higher than the advisory rates but cannot show the fuel cost per mile is higher, there will be no fuel benefit charge if the mileage payments are only for business travel.

I read that is its fine to pay more than the AFR's? You'd only be reimbursing business mileage anyway?

 

[Kenai]

I read that is its fine to pay more than the AFR's?

What that means is it won't be taxed as fuel benefit, it'll be taxed as additional income.

That statement is aiming to prevent confusion with tax implications of businesses paying for private mileage, as that's a different issue to 'overpaying' the advisory rates for business mileage.

 

[Jez]

Thanks for the education on that then That totally sucks, 5ppm is ridiculous.

I have always found it massively advantageous over many years to just run my own cars and claim 45/25 and a car allowance. My cars have always returned a profit that way despite them not being particularly economical ones. It sounds as though the smart move is to still run privately.

 

[Kenai]

Thanks for the education on that then That totally sucks, 5ppm is ridiculous.

I have always found it massively advantageous over many years to just run my own cars and claim 45/25 and a car allowance. My cars have always returned a profit that way despite them not being particularly economical ones. It sounds as though the smart move is to still run privately.

I do the same and it (usually) makes far more sense when dealing with conventional ICE vehicles. I think if you're going EV it's a decision that warrants investigating though - whilst the mileage reimbursement might not be as advantageous, depending on what allowances etc. you get then the massive BIK savings may well still prove to be the more economical route to take.

 

[Jez]

Yeah, i was thinking the same. You'd need to spreadsheet it - i wouldn't be surprised if the convention remains exactly the same. Claim the 45/25, charge at home and it'd probably pay for the car easily.

Where it falls down right now is that a nice EV is so expensive to buy. They still don't stack up to an ICE car unfortunately.

 

[Greebo]

hmm - had read apparently public charger ratio is not keeping up with ownership, I don't know if Boris's cop net zero strategy doc contradicts that
https://thedriven.io/2021/12/09/uk-...t-competition-for-charging-spots-intensifies/



e:yes they should analyse better charge rates available

I said this a year ago, all well and good encouraging EV buying but we are miles behind on infrastructure (again).

 

[lordrobs]

Thanks for the education on that then That totally sucks, 5ppm is ridiculous.

I have always found it massively advantageous over many years to just run my own cars and claim 45/25 and a car allowance. My cars have always returned a profit that way despite them not being particularly economical ones. It sounds as though the smart move is to still run privately.

Amen to that! My Octavia paid for itself and some when I was clocking up 1000 miles a month delivering school activities all over Norfolk. When I was running my old 306 it was even better.

I put a case forward to my current employer to run my own car but they've said the company car is compulsory

What sucks even more is that it is about 5cc below the threshold for the middle AFR bracket so I get 1 to 2 ppm LESS than it costs me to fuel the thing

 

[Greebo]

I read that is its fine to pay more than the AFR's? You'd only be reimbursing business mileage anyway?

Only for them paying you for you using your private car. for business use.

There are no AFR for reimbursing a person charging up a company vehicle at home. Thats the issue.

Having a private EV and getting paid 45/25ppm is bonanza time atm. A guy at our work went from a newish ICE car where the 45/25ppm just about covered the costs to making a killing with his tesla 3.

On the other hand if work supplies you with the EV there is minimal BIK and you can do salary sacrifice.

Either way you would be mad not to swap to EV if you use your car for work.

 

[Kenai]

Yeah, i was thinking the same. You'd need to spreadsheet it - i wouldn't be surprised if the convention remains exactly the same. Claim the 45/25, charge at home and it'd probably pay for the car easily.

Where it falls down right now is that a nice EV is so expensive to buy. They still don't stack up to an ICE car unfortunately.

I think a big part of the calculation is whether you can actually claim the 45/25 per mile directly or whether your company will pay car allowance recipients the company car rates and you only get the tax relief on the difference.

If you can get paid the 45/25 directly and an allowance, I think even with the big BIK discounts it'd be hard to make an EV stack up financially as a company car and as you say, privately they're still £££.