Expensing EV mileage UK

[Panther890]

Hi, if anyone can help id be hugely grateful, iv seen a few similar threads but nothing that answers my query. I have recently picked up my model 3 (yay). It is my private car owned by me however, I do some business milage. Im the first at my company to have an EV and they dont no what to do.

I am aware i am entitled up to 45p per mile but after discussion earlier, work seem only willing to pay 8p per mile (I think they are getting confused with the rate for company owned cars but its a small company and them giving me 45p seems unlikely) - although they are also happy to pay supercharger costs with receipts if I deduct this milage from the rest of the claim.

I have a home charger and will always leave for trips on a full battery but when i go on a work trip, due to distance il need to supercharge on way and on the way back.

Is there a way of me being able to expense the supercharger costs immediately and then put in milage claims on the rest? Im thinking it would get quite complicated as Id be in effect receiving two rates.

Am I better just recording milage, accepting the 8p per mile rate from employer and claiming 37p back per mile from HMRC? I dont usually complete a tax return but it looks relatively simple if im not claiming above £2500.

 

[Gatsojon]

Well the EV rate for company cars is a derisory 4p so it’s not that. 8p is not enough really these days. If they pay 45p for ICE then they should do the same for EV.

You can’t get the 37p back from HMRC, only the tax relief which depends on your tax rate. Better than nothing and probably plugs the gap for actual fuel cost.

Doing a claim based on a mix and match of fuel receipts and mileage allowance sounds like an admin ball-ache. You’d have to estimate the mileage driven on the supercharge delivery from your consumption figure and subtract from the total. Messy.

 

[Panther890]

Well the EV rate for company cars is a derisory 4p so it’s not that. 8p is not enough really these days. If they pay 45p for ICE then they should do the same for EV.

You can’t get the 37p back from HMRC, only the tax relief which depends on your tax rate. Better than nothing and probably plugs the gap for actual fuel cost.

Doing a claim based on a mix and match of fuel receipts and mileage allowance sounds like an admin ball-ache. You’d have to estimate the mileage driven on the supercharge delivery from your consumption figure and subtract from the total. Messy.

Thank you, i should have said that for ICE cars, my employer gives a fuel card to cover the cost and they dont pay anything additional for milage.

I pay tax at 41% so will the hmrc 'refund' be 41% of the 37p?

 

[browellm]

8p per mile is the current advisory rate for EVs from 1 December.

Your employer *could* pay you up to 45p for the first 10k miles (25p thereafter) without having to pay tax on the amount.

Therefore when you claim back you can claim your income tax rate*37p per mile for the first 10k miles.

If you are a 40% tax payer that's 0.4*37p per mile.

You can use Form P87 to claim mileage tax relief if you don't want or need to do a full self assessment.

 

[Panther890]

8p per mile is the current advisory rate for EVs from 1 December.

Your employer *could* pay you up to 45p for the first 10k miles (25p thereafter) without having to pay tax on the amount.

Therefore when you claim back you can claim your income tax rate*37p per mile for the first 10k miles.

If you are a 40% tax payer that's 0.4*37p per mile.

You can use Form P87 to claim mileage tax relief if you don't want or need to do a full self assessment.

Thank you, that is really helpful. Im in Scotland so tax rate is 41% would i do 0.41*37p?

I think il just try and limit my milage as much as possible if my work wont budge on the 8p.

Will look out the p87 form. Thank you again

 

[Xdeanyy]

Doesn't really help but 8p per mile as the advisory rate for EVs is a joke considering electric is comparable to petrol costs nowadays (if you rely on public chargers like myself)

 

[browellm]

Thank you, that is really helpful. Im in Scotland so tax rate is 41% would i do 0.41*37p?

I think il just try and limit my milage as much as possible if my work wont budge on the 8p.

Will look out the p87 form. Thank you again

Yes, forgot you have different income tax rates!

 

[Panther890]

Yes, forgot you have different income tax rates!

Thanks so much. Hmm a tiny benefited of being shafted by the higher Scottish tax bands - finally - LOL!

I will speak to my work tomorrow and hopefully we can agree on something above the 8p but at least im clear that charging for super chargers and expensing seperately is too complicated and a non starter.

 

[MrBadger]

Just ask work to supply a hire or pool car for business travel - they will soon start to pay the going rate.

They can pay you anything as a flat rate for mileage, but for flat rate if above advisory rate you will just have to pay tax on it.

 

[Panther890]

Doesn't really help but 8p per mile as the advisory rate for EVs is a joke considering electric is comparable to petrol costs nowadays (if you rely on public chargers like myself)

You are right. Luckily iv got a charger at home for day to day but all my work trips are hundreds of miles and il have no choice but to supercharge. Seems counter intuitive to have such low advisory rates when electric is seemingly the way the gov wants us to go.

 

[Panther890]

Just ask work to supply a hire or pool car for business travel - they will soon start to pay the going rate.

They can pay you anything as a flat rate for mileage, but for flat rate if above advisory rate you will just have to pay tax on it.

I do get a reasonably generous car allowance so sadly, I cant do that but even with the car allowance, i totally agree, they should still be paying the going rate which for any personal vehicle is 45p.

 

[MrT3]

I do get a reasonably generous car allowance so sadly, I cant do that but even with the car allowance, i totally agree, they should still be paying the going rate which for any personal vehicle is 45p.

Most companies that pay an allowance won’t pay 45p. 45p is meant to cover wear and tear as well as energy costs whereas your allowance is meant to cover the first part. The last two companies I’ve worked at have paid 20p and 18p for people with an allowance, both for ICE and EV owners.

 

[Js1977]

Just ask work to supply a hire or pool car for business travel - they will soon start to pay the going rate.

They can pay you anything as a flat rate for mileage, but for flat rate if above advisory rate you will just have to pay tax on it.

This.... I think people like this take the proverbial. Its your asset and being used and abused comes to mind! Also lets not forget the extra insurance premium....

 

[GeorgeSymonds]

your employer will have an expenses policy and you’ll have a contract if employment, they will determine what you can and can’t do and demand from your employer, you can’t just demand a hire car as some have suggested if you’ve an obligation to be mobile. Equally, you can’t use your own car unless you’ve taken out business cover on your insurance.

Many companies, especially those that pay an allowance in lieu of a company car, with treat your car the same as company car drivers, ie you need to provide a road worthy and insured car, and pay you mileage as if a company car. Personally, I think that entirely reasonable, you opted to take the cash. Without delving into the details of that, none us us can know what you’re legally able to argue with your employer.

Assuming 8p is lawful as per your contract, then as others have said, you can claim the difference as effectively extra tax allowance.

 

[spooksman]

Doesn't really help but 8p per mile as the advisory rate for EVs is a joke considering electric is comparable to petrol costs nowadays (if you rely on public chargers like myself)

The only good news is that HMRC have committed to reviewing the AFR for electric cars every quarter, along with the other rates, but yes, 8p is still not great compared to petrol, where they are higher (between 14p and 26p, depending on engine size).

With regards to the OP's question, and just confirming what others have said, your company can pay pretty much what they want, but that should be in the expenses policy (which should be available to you) - this is just about tax on the payment received. In my experience most employers pay a single rate these days (be that for petrol, diesel or electric) as the complexity of maintaining different rates, especially when employees have multiple different cars, is just too much overhead.

Very few now pay more than the HMRC AMAP rates (45p/25p) for private cars, and many do pay less (especially if you have a car allowance) - as stated, if you want to claim a tax rebate you use form P87 or do it via self assessment.

 

[btc1k]

8p per mile is the current advisory rate for EVs from 1 December.

Your employer *could* pay you up to 45p for the first 10k miles (25p thereafter) without having to pay tax on the amount.

Therefore when you claim back you can claim your income tax rate*37p per mile for the first 10k miles.

If you are a 40% tax payer that's 0.4*37p per mile.

You can use Form P87 to claim mileage tax relief if you don't want or need to do a full self assessment.

You don't claim for 40% of the 37p.

You would claim the expense. If you are claiming, say 1000 miles, at 37p, then you would claim £370 as a work expense.

Your taxable income is then reduced by the £370, and your net gain is at your marginal tax rate.

 

[btc1k]

Well the EV rate for company cars is a derisory 4p so it’s not that. 8p is not enough really these days. If they pay 45p for ICE then they should do the same for EV.

You can’t get the 37p back from HMRC, only the tax relief which depends on your tax rate. Better than nothing and probably plugs the gap for actual fuel cost.

Doing a claim based on a mix and match of fuel receipts and mileage allowance sounds like an admin ball-ache. You’d have to estimate the mileage driven on the supercharge delivery from your consumption figure and subtract from the total. Messy.

You are confusing AFR rates with AMAP rates.

AMAP is 45p and paid for any car, whether it be petrol, diesel or electric up to 10k miles.
This is the tax-free payment system where individuals use their own vehicles for work use.

AER/AFR apply to employees using a company car to reimburse fuel or if employees are required to pay the cost of private fuel on a company car.

 

[Jason71]

I do get a reasonably generous car allowance so sadly, I cant do that but even with the car allowance, i totally agree, they should still be paying the going rate which for any personal vehicle is 45p.

The 45p is supposed to cover not just fuel but tyres, maintenance, depreciation etc i.e. it is supposed to represent the real world cost of buying and running a car. If the company is basically giving you a lump sum every year in the form of a "car allowance" I think they might reasonably expect that that payment covers off those other issues and all they need to give you on an on going basis is enough to cover fuel.
now whether that adds up I don't know. Depends on how many company miles you do but I think it is not unreasonable to refuse to pay 45p on that basis.
That does not necessarily mean I think 4p or 8p etc is fair. The problem is everyone pays roughly the same for Petrol most of the time but electricity prices. vary by a factor of 10 so there is no simple way to. Do it. we need a new method that works for EV's

Here is my straw man opening proposal
work out the average kwh/m of an EV say 0.35 ( if you buy a car that does better than that that's a win for you same as would be with an ICE)
work out the average price of domestic electricity. currently I would use the price cap figure say 34p
then the price I would pay per mile would be 34*0.35 = 11.9p
BUT
what if the person could not charge at home or had to do long journeys out of range?
There would be a supliment.
for public charging I would also pay the (price per kwh charged - 34p)*number of kwh.

Obviously more complex than the current ICE methods but EV fuel pricing is more complicated than ICE fuel pricing. Unless we have something like the above there are going to me massive winners and losers in the EV fuel compensation game. At the moment the big winners are the companies paying 4p per mile and the big losers anyone reliant on public charging. Long term it is not sustainable.
I appreciate that anyone able to do all their charging on Octopus Go etc or Solar is going to be the big winner in the above proposal but its still better than the current system.

 

[GRiLLA]

You are confusing AFR rates with AMAP rates.

AMAP is 45p and paid for any car, whether it be petrol, diesel or electric up to 10k miles.
This is the tax-free payment system where individuals use their own vehicles for work use.

AER/AFR apply to employees using a company car to reimburse fuel or if employees are required to pay the cost of private fuel on a company car.

AMAP is a tax-free allowance, a company can pay up to 45p /mile for use of personal car without it being considered taxable. It's entirely up to a company to decide what they pay below that limit. If you don't get 45p you can claim tax relief on your normal salary for the remainder.

Any car allowance is taxed just like salary, so generally is pretty meagre, and to be honest is really just a way for them to engineer your salary. It will depend on your business milage but could easily be a poor deal. For example, I get £5K car allowance, which is £3K after tax. If that's used to justify paying at 8p rather than 45p then after 13,600 business miles, you are perhaps losing out (assuming you claim back the difference in tax). Personally, I would rather not get a car allowance and negotiate a salary that isn't preloading travel costs.

My employer chooses to pay 45p but only after decrementing your usual commuting cost to their central London office, so I've got to travel pretty far for a claim to be worth it. Fortunately, I do very few business miles.

 

[browellm]

You don't claim for 40% of the 37p.

You would claim the expense. If you are claiming, say 1000 miles, at 37p, then you would claim £370 as a work expense.

Your taxable income is then reduced by the £370, and your net gain is at your marginal tax rate.

You just said some words in a different order which have the exact same outcome.