VAT liability of charging electric vehicles
HMRC has clarified the VAT treatment of the supply of electricity for electric vehicles in Revenue and Customs Brief 7 (2021), but the outcome is not what you may expect.
Replies (7)
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Well now what about the situation where I charge my car from my own electricity supply direct from the sun, am I now an electricity supplier and subject to all the regulations.
Mind you if all cars where electric how does the Government recover all that tax revenue from fossil fuels?
Road pricing...
I have a friend who worked for v large technology company who desperately tried to get a roll through tolling contract so that they would be the incument technology when road pricing started. Their analysis was that the Treasury is a road fuel tax junkie and would need to replace fuel duty to feed their habit.
As for the VAT on charging an electric car, the culture set by HMRC's micro analysis of definitions beyond the absurd explains why, when there is something claimable (R&D, SEISS), taxpayers do exactly the same!
Morality becomes irrelevant, is it within the rule? If you tuck people up they are likely to respond in the same way.
Oh dear. What will happen to domestic supplies when consumption exceeds 1,000 units. We already have used very close to 1,000 in one month when the electric Aga is put on for a houseful of guests at Christmas. With two cars in a family doing lengthy daily commutes and charging mainly at home a family could face substantial unexpected bill increases. And how is the increased rate charged - on a month by month basis, i.e. if you have exceeded 1,000 units that month you pay the additional VAT just for that month. Or done on an average basis retrospectively. Or is there a trigger - go over 1,000 units in one month and you pay the higher rate all months until there is some trigger for the rate to reduce. And how would the VAT be affected by an unusually large monthly bill because of previous inaccurate estimating? This puts an added complication on a petrol or electric car purchase decision, that needs to be factored into any costing model.
I thought all domestic supplies remained at 5% even if they went over 1000 kw per month.
My domestic electricity supplier is still charging VAT at 5%, despite our estimated usage being 15,000 units (we have 2 electric cars and worked from home all year). Now I am worried I am in for a big retrospective bill if this is wrong!
BTW if anyone is thinking of getting an electric car, our Hyundai Ioniq is very cheap to run - our usage barely increased - but my husband's Tesla model 3 is ridiculously hungry for electricity and is costing us a fortune :(
Don’t Tesla include electricity as part of the deal?. Thought if you charge at a Tesla point it was free.
Sooo. If I work from home and charge my car there, would it count as business or domestic if, as others have said, the usage exceeds the 1k units?
Presumably in order for Electricity Companies to charge the 20% VAT when charging a car at home they will need to install a separate meter. Otherwise how will they know which electricity is domestic and which is for chargeing the car.