Update on VAT recovery on electric vehicle charging

HM Revenue & Customs (HMRC) has updated Notice 700/64 to address the recovery of VAT on electric vehicle (EV) charging.  

The new guidance reflects HMRC’s position as set out in RCB 7(2021) last May. For example, businesses can potentially recover VAT on electricity used by employees to charge their EVs at work, to the extent that they can provide evidence of business mileage. VAT recovery is not permitted if an employee charges their EV at home, even if it is used for work. The Notice now confirms that businesses will be able to treat VAT on the use of public charging points by their employees as input tax.  

In RCB 1(2022), HMRC has also stated that it is reviewing the evidence that should be retained by businesses which reimburse employees for the actual cost of electricity used in charging an EV for business purposes. Other simplification measures that may reduce administrative burdens in terms of accounting for VAT on private use are also under consideration. Further guidance will follow on the conclusion of the review. 

The BVRLA policy team engaged with both HM Treasury and HMRC last year on VAT rules on EV charging and asked for the above review. The team will continue to liaise with the government on this matter, if any members have additional queries around VAT rules and EV charging that they would like to see raised, email BVRLA Head of Policy and Public Affairs Thomas McLennan