electric car business mileage rates
HMRC: doesn't treat electricity as a fuel
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COMPANY car owners who have electric cars are in for a shock.

They might be able to charge their company car but they can’t charge for business mileage.

And the reason, according to the tax man, is that electricity is not a fuel.

HMRC rules say that “advisory fuel rates are based on the average price of fuel per mile – electricity is not a fuel”.

ACFO, the UK’s leading fleet-decision-makers’ organisation, is holding ongoing discussions with HM Revenue and Customs about electric business car mileage rates but currently there is no way to reclaim the cost of the electricity used.

Business woman charging up an electric car
Use your private electric car for business and claim 45ppm

So sadly there is no good news for the reader, Chris Sullivan, who contacted us to say he personally paid for the electricity that powers his Nissan Leaf company car – at 5p per mile or £400 per year – and couldn’t find an electric business car mileage rate to claim back his expenditure.

It would be different if he had bought the car privately and then expensed the running costs through the company via the AMAP rates, which would be 45p per mile tax free for the first 10,000 miles of business mileage, and 25p per mile thereafter – see the comments section of our story Tax: Business mileage rates for using a private car (AMAPs).

 

 

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1 COMMENT

  1. I don’t see any reason why you could not use an average PPM rate. This is allowable today where you divide the fuel spend for the period by the miles driven in that period, resulting in a PPM for all mileage. Once you have the PPM for all mileage then multiply that by the personal mileage.

    Same goes here I would think.

    If Chris spent £400 on electricity charging his car and then drove 400 miles (example only) then it works out at £1 per mile. If business mileage is 50% (200 miles) then claim back £200 from your employer. Seems like it should work

    HMRC would have to be pretty stingy to challenge this, so long as you have accurate mileage records and can show the cost of charging your car. It is a legitimate expenses after all.

    I do however agree that HMRC does need to address the ambiguity. If I were a company car driver considering an EV it would make me think twice. We need to reduce barriers for EV adoption wherever possible.

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