Consultation on electric car workplace charging tax exemptions

HMRC has launched a technical consultation seeking comments on workplace charging tax exemptions for electric and plug-in hybrid vehicles which were announced at Autumn Budget 2017

The consultation asks for views on draft updates to the employment income manual for the expected changes to the Income Tax (Earnings and Pensions) Act (ITEPA) 2003 from Finance Bill 2018-19 which have retrospective effect from 6 April 2017.

It covers the provision of workplace charging facilities, which vehicles the exemption covers, and the qualifying conditions of the exemption.

From 6 April 2018, where an individual is provided with workplace charging facilities for their own car or van, no taxable benefit arises in respect of costs relating to the provision of electricity at those facilities if the qualifying conditions are met.

These conditions are the provision of dedicated charging points specifically designed for the purpose and which are provided at premises under the control of the employer.

The charging facilities must be provided to all employees generally, or all the employees at a particular location. Charging facilities must be for a car or van in which the employee is either the driver or a passenger.

The benefit will remain taxable if it is offered in conjunction with an optional remuneration arrangement. The exemption is a relevant exemption as defined in s228A(1)-(3) ITEPA 2003 (EIM44131).

The exemption applies to charging facilities for all-electric and plug-in hybrid cars and vans and covers the cost of electricity, the cost to the employer of providing the charging facilities, and any connected services.

The exemption does not apply to the reimbursement or payment of an employee’s personal expenditure in respect of electric charging away from the employer’s premises, for example at a motorway service station. Where an employer reimburses an employee’s electricity costs for charging the vehicle other than on the employer’s premises and the electricity is then used on a business journey, the employee may be entitled to approved mileage allowance payments (AMAPs) or mileage allowance relief (MAR).

The consultation closes on 5 July.

Draft guidance: reform to workplace charging tax exemptions is here.

Report by Pat Sweet

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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