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VAT Notice 701/19

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EV charging: VAT position clarified

Supplies. The legislation applies a reduced VAT charge of 5% to supplies of fuel and power where the amount does not exceed small quantities. These thresholds are commonly known as the de minimis limits. It has often been assumed that these limits would also apply to supplies at public charging points to charge an electric or hybrid vehicle.

Change.VAT Notice 701/19 (see The next step ) was amended by HMRC’s policy team on 5 January 2024 to confirm that the de minimis limits do not apply to any fuel and power supplied from a public charging point, such as a supermarket, petrol station or public car park. Per para 3.2.2: “The recharging of electric vehicles, when using public charging points is always treated as standard rated for VAT.” And para 5.3 adds: “The recharging of electric vehicles when using public charging points is always treated as standard rated for VAT, regardless of the quantity of electricity supplied.”

Input tax. If your employees use their own vehicle or a company vehicle for business purposes, then input tax can be claimed on the charging costs incurred at a public charging point. The tax to claim will be 1/6 rather than 1/21 of the total payment, i.e. the fraction for 20% VAT.

Trap. You must restrict your input tax claim for any private use of the vehicles, or account for output tax on such use.

Warning. Business owners - sole traders and partners - can claim input tax on the cost of charging their electric vehicles at home, assuming business use etc. The VAT rate will be 5%. However, HMRC says that input tax claims for employees and directors are blocked for home charging because the supply of electricity is being made to the individual employee and not your business.

Tip. The best VAT solution is for you to insist that your employees only charge their vehicles at either your business premises or a public charging point.

The next step - VAT Notice 701/19