Recovery of VAT on charging electric vehicles
On 25 May 2021 HMRC published a document setting out its policy regarding when the self-employed and employers can recover VAT on the cost of charging electric vehicles:
VAT recovery for the self-employed
The self-employed can recover VAT on charging electric vehicles for business purposes. A record of business and private mileage should be kept. VAT on the private element of the cost should not be recovered. The usual VAT recovery rules apply including the restrictions for partially exempt businesses.
VAT recovery for employers
If employees charge an electric vehicle at home employers cannot recover the VAT. This is because the supply is made to the employee and not to the business.
If employees charge an employer’s electric vehicle, for both business and private use, at the employer’s premises, the employee needs to keep a record of their business and private mileage. This is so that the employer can work out the amounts of business use and private use for the vehicle. If VAT on private mileage is recovered there will be a deemed supply on which output tax should be accounted for. The usual VAT recovery rules apply including the restrictions for partially exempt businesses.
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