EV Tax Efficiency
Electric vehicles and low emissions (known as EV) are still a very tax efficient option for clients. Even though the BIK (Benefit in Kind) tax rates increase year on year, EV’s will continue to be a tax efficient option for business and employees alike.
There are questions we regularly are asked in parallel to the tax costs:
Can I claim mileage on EV’s which are owned personally
For any employee who uses their own EV whilst on business travel, they can claim an allowance per mile, which HMRC’s Mileage Allowance Payment (MAP) has set the rate at 45p per mile for the first 10,000 miles then 25p for any additional miles, additionally you can claim 5p per mile for each passenger who is in the vehicle on the same business trip. These rules are the same for petrol and diesel cars and is calculated to cover the the running cost of the vehicle and finance.
Employees who charge a company EV at home
The issue is it is difficult to be able to quantify the cost of charging at home as a percentage of a overall household bills, so the best basis is to use the rate of 8p per mile. This means there is no issues of claiming for the cost and incurring tax and NI when home charging if you claim for actual costs
What about the cost of installing a charging point at the employee’s/directors house
When a charging point is installed at the house there will be no BIK as a result meaning it becomes a tax free benefit.
What about if a EV is charged at the workplace.
If you charge your personal EV at the workplace, then there is no BIK and it is exempt from BIK which applies to both Business and Personal travel
No two cases are the same so please get in touch with our tax team on tax@callan-group.com for a detailed and bespoke review
