We have a client whose company is paying for the installation of a home charger for the director, how would the electricity used for charging the car be accounted for to enable the company to pay for this.
Replies (21)
Please login or register to join the discussion.
Install a separate meter?
Exactly. Either you can isolate a particular usage to measure it or you can’t.
B.M.O.s have separate meters. Take your pick of suppliers.
https://www.smartpowershop.co.uk/electricity-meters/
Yes, you can use your own sub meter- this is not a distinct supply from say another electric supplier but merely a measure of what part of your main bill goes through the charging point. (We used to have a commercial property with one main supply and circa 30-40 sub meters which we read and used to rebill the tenants)
Why would you do this? If any of the electricity is used for private mileage, it's presumably a bik. Why can't Director just pay himself an appropriate rate for business mileage.
Is there a bik anyway on installation of the home charger?
Provided it is paid by the employer and not reimbursed, that is how I believe it to be.
That’s not what the link says (unless the employee’s home is “at work”?):
“Employer allows cars to be recharged from a vehicle charging point at work.”
If you’re relying on the employer being charged for the electricity used at the employee’s home, presumably the employer would need to be the customer for said supply.
Did you scroll down?
Btw, nice to see at least HMRC quotes supporting legislation. HMRC 1, Awebbers 0.
HMRC quotes supporting legislation.
Weird how ambiguous that is. You could read adjective, noun, verb, noun. I meant noun, verb, adjective, noun.
CW2012
"Provided it is paid by the employer and not reimbursed, that is how I believe it to be."
It would help if you could quote the exact subsection you are referring to from link provided. (I can confirm i have scrolled down )- perhaps its me being thikko here but there are various different scenarious listed and its clear as mud to me which listed scenario you think applies to the circusmtance you are talking about!
I think the table is pretty clear (and pretty good). Your difficulty, I suggest, is because you have filled in the huge gaps in the information the OP has provided, your filler is assumption and based on that you have come up with a circumstance.
Of course your assumptions may well be right. In which case I agree OP is wrong. In that circumstance.
"I think the table is pretty clear (and pretty good). Your difficulty, I suggest, is because you have filled in the huge gaps in the information the OP has provided, your filler is assumption and based on that you have come up with a circumstance."
Yep agreed hence my request that op provide futher specific info. I was struggling to get to the default position that they would be ok based on the following specific comments made by the OP "no BIK on the charging" - too many blanks to fill in here.
https://www.bvrla.co.uk/guidance/tax-vat/bik-and-home-chargepoints.html
HMRC manuals here https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim23900
From a VAT perspective, there is no VAT reclaim on home charging because supply is to home owner, not business (unless a sole trader).
https://www.gov.uk/government/publications/revenue-and-customs-brief-7-2...
Most EV chargers are on a smart meter and smart tariff, I'm on Octopus Go, 5p per kwh for 4hrs per night and it costs about a £1 per night (as I also run the dishwasher, tumble dryer and washing machine at same time at same 5p rate).
Being realistic, domestic electricity is 5% VAT rate and assuming the car is used wholly for business miles only, with zero personal use, and assuming £1 per day of electricity, that's £365 per year with a VAT reclaim of £17.38!
If we then take a view that the car is not wholly business miles only and is used for personal trips, then the VAT reclaim is even less. If an expense claim form is filed by the employee, the current advisory fuel rate for EV cars is 5p per mile (updated rates last week) https://www.gov.uk/guidance/advisory-fuel-rates
I looked into this fairly extensively for our company EV. For the charging to be BIK exempt then there would need to be a seperate meter and account in the company's name with all utility bills going to the company. The alternative is for the company to reimburse the user for electricity usage but this is treated as taxable income. The user can partly offset this my claiming 5p per mile for any actual business usage. Electric charging is not FUEL so there is no fuel BIK,