Charging of electric vehicles

HMRC has clarified that supplies of electric vehicle charging through charging points in public places are subject to the standard rate of VAT. Revenue and Customs Brief 7 (2021): VAT liability of charging of electric vehicles sets out the basic principle and also outlines how and when businesses can recover input tax.

A reduced rate of VAT for supplies of small ‘de minimis’ quantities of electricity applies for certain supplies, but only where the supply of electricity is ongoing, to a person’s house or building, and less than 1000 kilowatt hours a month – essentially covering charging the vehicle at home. This de minimis provision does not, however, apply to supplies at charging points in public places.

Businesses can recover input tax for charging electric vehicles in some circumstances but not others, for example:

• a sole proprietor can recover the input tax for charging an electric vehicle at home or at other places where the charging is for business use;
• employees charging an electric vehicle (which is used for business) at home cannot recover the VAT, because the supply is made to the employee and not to the business;
• employees charging an employer’s electric vehicle (for both business and private use) at the employer’s premises must keep a record of their business and private mileage so that the business can work out the amounts of business use and private use for the vehicle.