The popularity of electric and hybrid cars saw HMRC introduce dedicated mileage rates for hybrid and electric vehicles in 2018. In this article we explain the potential tax benefits and how to claim mileage rates for electric vehicles.

Can I get a grant to buy an electric vehicle for my business?

There are grants available for some types of new (not used) electric vehicle, although these are mostly restricted to vans, motorcycles, and wheelchair accessible vehicles.

Rather than applying for the grant separately, the seller will automatically include the discount in the price. Check the full list of vehicles eligible for the plug-in grant.
 

Can I claim mileage expenses for an electric or hybrid car?

The increase in electric cars on the road means that HMRC do now offer mileage expenses for business travel in an electric vehicle, though different rules apply depending on who owns it.
 

Mileage rates for employees using a company car

Employees who drive a company car are paid mileage based on the size and type of engine in the vehicle. We’re going to emphasise that these are the rates for someone driving a company car, not their own personal vehicle.

• The mileage for petrol, diesel and hybrid company cars in this category is paid at the Advisory Fuel Rates
• The mileage rate for fully electric cars in this category is paid at the Advisory Electricity Rate

You can check the rates which were being used when the journey was made by visiting the Gov.UK website. The rates are updated every three months on 1st of March, June, September, and December.

Do employees pay tax if they use a company car?

Employees who use a company car may be liable to pay tax on the value of the ‘benefit’ that they’re receiving. Benefits in Kind can be quite complicated, but will normally mean that:

• The employee will pay tax on the value of the benefit either through payroll or when their employer submits a P11D form
• The employer will make Employer’s National Insurance Contributions (NICs) on the benefit’s value

If you’re the owner and director of a limited company these extra charges might mean that owning the vehicle through the business is less tax efficient (unless it’s a fully-electric vehicle).

Business mileage rates using a personal car

If you use a personal vehicle for business (or your employees use their own car for your business), the mileage rates are a bit different. This is because the expenses don’t just cover fuel, they also cover the cost of running the vehicle too.

These are known as Mileage Allowance Payments. The rates are based on the type of vehicle which is used, and how many miles per year are travelled. You might also find it useful to learn more about simplified expenses if you work from home!

What’s the difference between Advisory Fuel Rates and Mileage Allowance Payments?

Advisory Fuel Rates are used to calculate mileage for someone driving a company car, rather than a vehicle they own personally.

Mileage Allowance Payments are used if the driver travels in their own personal vehicle for business. They’re a bit different because MAPs are designed to cover the cost of using a privately-owned vehicle for a business journey, not just the fuel that goes in it. For instance, it includes wear and tear on the tyres.

Advisory Fuel Rates only need to factor in the cost of the fuel because the company already deals with the cost of wear and tear on the vehicle.

Are there business grants for electric vehicle charging points?

Yes, eligible businesses, charities, and public sector bodies can apply to the Workplace Charging Scheme (WCS) for help with the initial costs of buying and installing electric vehicle charging points.

How much can I get through the Workplace Charging Scheme (WCS)?

The Workplace Charging Scheme (WCS) grant will cover up to 75% of the total costs of the buying and installing charging points for electric vehicles (inclusive of VAT), up to a maximum of:

• £350 per socket
• 40 sockets across all sites per applicant. For example if your business operates across 40 different sites, you could install one socket in each

Am I eligible for a vehicle charging point grant?

The Workplace Charging Scheme (WCS) is only available to registered businesses, charities, and public sector organisations located in England, Wales, Scotland or Northern Ireland. Unfortunately, applicants in the Channel Islands and Isle of Man are not eligible.

You’ll need to prove that you have dedicated off-street parking available for staff or vehicles in your fleet, either on your premises or reasonably nearby. If you don’t own the property, you’ll also need to show the landlord consents to having charging points installed. Each site must:

• Have a minimum power supply of 3kW to each individual socket that is not diminished by their simultaneous use
• Have no more than one socket installed for each accessible parking space
• Be for staff and/or fleet use

You might also be able to apply for the grant if you’re a small accommodation business. These are categorised as having 249 employees or less, and with a Standard Industrial Classification (SIC) code of:

• 5510: hotels and similar accommodation
• 5520: holiday and other short-stay accommodation
• 5530: camping grounds, recreational vehicle parks and trailer parks

There are restrictions on how much public support you can access over a period of time. If you make an application to the Workplace Charging Scheme (WCS), you’ll need to declare that your organisation has received less than €200,000 of public support in the last 3 financial years (your current financial year plus the two financial years before it).

The business must also satisfy the state aid requirements for de minimis aid, which is split into four sectors:

How do I apply?

You can apply to the Workplace Charging Scheme (WCS) using the online form . The grant is voucher-based, so successful applicants will be given a unique voucher code to pass on to installer (who must be authorised by the Office for Zero Emission Vehicles).

 
You’ll need to support your application with either:

• Your Companies House registration number
• VAT registration number
• A business rate (non-domestic rate) bill issued by the local council or the Land & Property Services (LPS)
• A copy of your Charity Commission registration or a letter from a principal regulator

 
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