The Government is sending out mixed messages about electric vehicles. It encourages employers to provide charging points for electric vehicles but penalises employees who drive company-provided electric cars or vans. Here are the facts that employers need to know.
An employee provided with an electric company car will see their taxable benefit leap from 9% of list price to 13% of list price on 6 April 2018, and it will increase again to 16% of list price on 6 April 2019. Bizarrely on 6 April 2020 the taxable benefit for an electric company car will reduce to 2% of the vehicle’s list price.
The taxable benefit for using an electric van for private journeys more than doubles on 6 April 2018 from £646 to £1,340 per year, which is still a bargain compared to the benefit for an electric company car.
Currently charging a company owned electric car or van at work for free is not a taxable benefit, as electricity is not a “fuel” for the car benefit regulations. However, where employees are permitted to charge their own electric vehicles at work for free, the cost of the electricity used is a taxable benefit.
In the Autumn Budget on 22 November 2017 Philip Hammond announced that the law would be clarified, such that employees would not be taxed on a benefit in kind when the charge their own electric vehicles at their workplace. This change was to apply from “next year”, which presumably was supposed to be from 6 April 2018.
The law has not been clarified, there is in nothing in FA 2018 (passed on 15 March), and there are no new regulations. The CIOT has been assured that the law will be changed in FA 2019 and backdated to 6 April 2018.
Where the business installs electric charging points for vehicles in the period from 23 November 2016 to 31 March 2019, it can claim a 100% capital allowance for those costs.
Written by the Tax Advice Network