Nowadays, electric vehicle charging points usage is becoming more common in public places as the use of Electric vehicles is increasing. HMRC has clarified the rules in the below specific cases as they received requests from businesses and business representatives:

  1. The VAT should be charged at a reducing rate if the charging supply for the electric vehicles is at charging points installed in public places.
  2. The recovery of input tax if the electric vehicles are charging for business purposes

The liability of VAT for the vehicles charging through charging points installed in public places:

The standard rate of VAT will be charged if the supply of charging for electric vehicles is through charging points in public places. Also, there will not be any exemption or relief that reduces the rate of VAT charged.

The de minimis provision

If the electric supplies are in small quantities then there will be a reduced rate of VAT, known as ‘De minimis’. If the supply of electricity will be of the following, then only de minimis provision will be applied:

  • Ongoing
  • To a person’s house or building
  • Less than 1,000 kilowatt hours a month

Recovering input tax for charging electric vehicles:

The input tax can be recovered if all of the below will be applied for charging your electric vehicle:

  • You are a sole proprietor
  • You charge your electric vehicle at home
  • The electric vehicle is charged for business purposes

For more information, click here.