Policy paper

Revenue and Customs Brief 7 (2021): VAT liability of charging of electric vehicles

Published 25 May 2021

Purpose of this brief

This brief explains HMRC’s policy concerning the VAT treatment of charging of electric vehicles, when using charging points situated in various public places.

In particular it clarifies that the standard rate of VAT applies to supplies of electric vehicle charging through charging points in public places. It also explains when input tax can be recovered for charging electric vehicles for business purposes.

Who should read this

Suppliers who provide electricity through electric vehicle charging points and motorists who charge up their vehicles for business purposes.

VAT liability background

The use of electric vehicle charging points is becoming more common in public places. HMRC has received requests from businesses and business representatives to clarify the rules in specific cases, and in particular to confirm:

  • if supplies of electric vehicle charging at charging points in public places should be charged at the reduced rate of VAT
  • when input tax can be recovered when charging electric vehicles for business purposes

HMRC’s policy

VAT liability for electric vehicle charging through charging points in public places

Supplies of electric vehicle charging through charging points in public places are charged at the standard rate of VAT. There is no exemption or relief that reduces the rate of VAT charged.

The de minimis provision

There is a reduced rate of VAT for supplies of small quantities of electricity, known as ‘de minimis’. The de minimis provision only applies if the supply of electricity is all of the following:

  • ongoing
  • to a person’s house or building
  • less than 1,000 kilowatt hours a month

The de minimis provision does not apply to supplies of electric vehicle charging at charging points in public places. This is because these supplies are made at various places such as car parks, petrol stations and on-street parking, not to a person’s house or building. In addition, these supplies are not usually an ongoing supply to one person where the rate of supply can be calculated.

Recovering input tax for charging electric vehicles

You can recover the input tax for charging your electric vehicle if all of the following apply:

  • you are a sole proprietor
  • you charge your electric vehicle at home
  • you charge your electric vehicle for business purposes

You should work out how much of charging your electric vehicle is for business use and how much is for private use. You can recover VAT on only the business use amount. The usual input tax rules apply.

As a sole proprietor, you can recover the input tax for charging your electric vehicle for business use at other places. The usual input tax rules apply.

The rate for recovery of input tax for charging electric vehicles is the same as the VAT rate charged on the supply of electricity.

Employees charge an electric vehicle (which is used for business) at home

You cannot recover the VAT. This is because the supply is made to the employee and not to the business.

Employees charge an employer’s electric vehicle (for both business and private use) at the employer’s premises

Your employee needs to keep a record of their business and private mileage so that you can work out the amounts of business use and private use for the vehicle.

You can recover the full amount of VAT for the supply of electricity used to charge the electric vehicle. This includes the electricity for private use. However, you will be liable for an output tax charge on the amount for private use. This is because a ‘deemed supply’ has been made. Alternatively, you can recover VAT on only the business element. The usual input tax rules apply.

More information

If you have any further questions about these changes, check VAT: general enquiries to find out how to contact us.