Fuel card benefit moving to EV

[NigelT]

I currently have a private car and also a fuel card from my employer. All my fuel is reimbursed and I make no repayment for private mileage. I pay tax on all my fuel based on the P11D amount then make a tax return for my business mileage at 45p/mile tax relief. There is no option available to take a mileage rate instead of a fuel card.

Having a Tesla on order, I asked my employer what they propose. They haven't decided yet, however, have asked how easily I can get the actual costs for electricity including from home charging, I have a rolec smart charger, it has an app but I have no car to test with yet, I don't know if its realistic or easy to get a monthly value of what the car has consumed from that.

So it looks like they would like to just reimburse all the cost of the fuel regardless of whether that is petrol/diesel or electric.

I just wondered if anyone has had or is in a similar situation at all, or any thoughts?

Thanks!

 

[MrBadger]

You can try TeslaFi which records charges and costs. I have a referral code if you want to extend your trial from 2 to 4 weeks - I get a $5 credit. Otherwise its $50/year.

 

[arg]

I currently have a private car and also a fuel card from my employer. All my fuel is reimbursed and I make no repayment for private mileage. I pay tax on all my fuel based on the P11D amount then make a tax return for my business mileage at 45p/mile tax relief.

Are you sure? 45p is not the right rate for that situation.

45p is the AMR rate for company use of a privately-owned car, where the rate is intended to cover the fuel, the incremental running costs, and a contribution to the fixed costs of providing and insuring the car (the rate goes down above 10K miles/year to reflect that the fixed cost is all covered).

12p/14p/21p is the AFR rate for providing just fuel to run a company-owned car. This is normally used the other way around (no fuel card and company pays you this much for business miles); it would seem reasonable to use it in the fashion that you are, though I have no idea if it is accepted practice.

For a company-owned EV, fuel benefit does not apply - so you will not pay the tax for fuel via your P11D as you do now, whatever they do about it.

Special rules for EVs are listed here: EIM23900 - Employment Income Manual - HMRC internal manual - GOV.UK

You can certainly charge at work without incurring any benefit, and they can reimburse actual costs for use of public charging (including a Polar subscription or similar). For home charging, it appears they can pay for all the electricity (business and private), or you can pay for the electricity and claim for business miles at the AER (4p/mile).


As to what you should actually do, bear in mind that the cost of home charging is so cheap that it's not always worth getting the figure precisely right.

If the employer is very generous, they could pay for your home electricity (which hopefully your Rolec will meter for you, though slightly questionable if this falls into the category of "employer pays for electricity") and actuals for any costs incurred away from home (supercharging, other public charging).

If I was the employer, I'd probably have a chargepoint at the office, and pay you via the normal expenses system for any charging away from home, but not pay for your home electricity bill on the grounds that it is mostly for your commute anyhow.

 

[NigelT]

Are you sure? 45p is not the right rate for that situation.

I might regret asking this but why isn’t it?

For your other point, yes we are talking all electricity related to the car including home charging.

There is no commute so there is no work place charger situation ever going to happen. With regards to home electricity “being mostly for commute” they already do pay for that in the form of a fuel card that covers all private and business mileage. What I am saying is it seems they are looking for a way to create a parity of this policy but with electric which must by its definition include home electricity consumption costs.

So if I can cleanly record home charging kWh, there would still be no BIK? Interesting if that turns out to be the case. Public chargers are of course a lot easier to get a receipt etc.

 

[arg]

I might regret asking this but why isn’t it?

edit: ****** See posts below, this advice assumed company car which is not the case here.


Because that rate is meant to cover the cost of providing the vehicle as well as the cost of operating it - that rate is the one for people who own their own vehicle and make it available to the company for business miles, so the company can legitimately make a contribution to the standing costs (and if they don't you can legitimately recover tax from money that they did give you - your salary - to cover this business expense).

As I understand it, your case is a company car so the only cost you are incurring is to provide it with fuel - except that the company have already paid for that with a fuel card (which you were taxed on). Actually, I am not at all sure you are entitled to any tax recovery in your current situation. Your argument is that you have been taxed on fuel for private use that you are now using for business use, but with the special (and deliberately irrational) rules for fuel benefit I believe it's considered a flat rate regardless of the business/private split. Have a look at 13.1 in this document.

So if I can cleanly record home charging kWh, there would still be no BIK?

There is absolutely definitely no "fuel benefit" BIK (the one calculated based on car value, that you currently pay on account of your fuel card) - electricity is not considered to be a fuel for that purpose.

The BIK (if any) is like any other expenses payment that is taxable on the actual value of the benefit to the extent that it isn't a legitimate business benefit.

So, if the company pays for all your charging, the starting point would be that you would be taxed (via P11D) on the value of that used for personal use (so take the total charging cost * (personal miles/total miles)). However, there's then some slightly odd exceptions: workplace charging is not taxable at all (albeit no help to you); and then the rules I linked before which draw a distinction for charging at home between "electricity provided by the employer" and "employer reimburses the electricity cost" - with the former being entirely tax free, the latter taxable for the portion that is for private use. So arguably no taxable benefit, though a matter of interpretation.

You said that there is "no commute" - does this mean that your home is your workplace, in which case this is workplace charging and again no taxable benefit?

 

[NigelT]

Because that rate is meant to cover the cost of providing the vehicle as well as the cost of operating it - that rate is the one for people who own their own vehicle and make it available to the company for business miles, so the company can legitimately make a contribution to the standing costs (and if they don't you can legitimately recover tax from money that they did give you - your salary - to cover this business expense).

As I understand it, your case is a company car so the only cost you are incurring is to provide it with fuel - except that the company have already paid for that with a fuel card (which you were taxed on). Actually, I am not at all sure you are entitled to any tax recovery in your current situation. Your argument is that you have been taxed on fuel for private use that you are now using for business use, but with the special (and deliberately irrational) rules for fuel benefit I believe it's considered a flat rate regardless of the business/private split. Have a look at 13.1 in this document.



There is absolutely definitely no "fuel benefit" BIK (the one calculated based on car value, that you currently pay on account of your fuel card) - electricity is not considered to be a fuel for that purpose.

The BIK (if any) is like any other expenses payment that is taxable on the actual value of the benefit to the extent that it isn't a legitimate business benefit.

So, if the company pays for all your charging, the starting point would be that you would be taxed (via P11D) on the value of that used for personal use (so take the total charging cost * (personal miles/total miles)). However, there's then some slightly odd exceptions: workplace charging is not taxable at all (albeit no help to you); and then the rules I linked before which draw a distinction for charging at home between "electricity provided by the employer" and "employer reimburses the electricity cost" - with the former being entirely tax free, the latter taxable for the portion that is for private use. So arguably no taxable benefit, though a matter of interpretation.

You said that there is "no commute" - does this mean that your home is your workplace, in which case this is workplace charging and again no taxable benefit?

OK thank you, I kind of understand now. One point of clarification, it is a private car NOT company car apologies if I wasn’t clear on that, or maybe it was poor grammar haha. Easy enough to miss these details though.

tbh sounds like too much hassle for an employee and I think straight xx p/mile is easier on everyone. As the “benefit” of “free fuel” is less so when it’s electric vs petrol prices.

thanks for your thoughts on the matter

 

[Rooster6655]

OK thank you, I kind of understand now. One point of clarification, it is a private car NOT company car apologies if I wasn’t clear on that, or maybe it was poor grammar haha. Easy enough to miss these details though.

tbh sounds like too much hassle for an employee and I think straight xx p/mile is easier on everyone. As the “benefit” of “free fuel” is less so when it’s electric vs petrol prices.

thanks for your thoughts on the matter

Son’t see why you can’t charge 45p per mile as you have been as it’s a private vehicle.

I’d pay for my own charging and then just charge per mile for the business trips.

 

[NigelT]

Son’t see why you can’t charge 45p per mile as you have been as it’s a private vehicle.

I’d pay for my own charging and then just charge per mile for the business trips.

I agree with you and I think I’ll have that discussion. I have a fuel card right now for all fuel, once a year I do a tax return to claim the 45p of tax relief via HMRC. This scenario with a private car is very different to a company car. Effectively you end up paying 40% of the value of the fuel minus any tax relief you might be owed.

So with a few thousand £££ of petrol/diesel a year it’s quite a nice benefit. Less so when it’s a few hundred, at most, of electric.

As it stands today though there is no policy for mileage payments. It’s fuel card or nothing

 

[arg]

One point of clarification, it is a private car NOT company car.

My apologies - I misread that as company car and so all my advice above is completely wrong.

Yes, for business use of private car 45p is the right mileage rate; you would normally have to adjust that for the company having provided fuel, but apparently in your case you have already been fully taxed on that and so the whole 45p/mile is available to claim.

With the electric car, the 45p remains the rate to claim.

Unfortunately, for private car the home charging (if paid by the company) is taxable, unless you are able to argue that your home is a workplace.

Ignoring the tax aspect, exactly what the company should give you to be "equivalent" to the fuel card for ICE drivers is an interesting question. You could just say that they ought to pay the full cost of all the charging (which will be much less than the cost of the fuel card). However, with the ICE, they are paying for all your fuel including private use, so to an extent the 'win' on the private mileage is covering some non-fuel costs of the business miles and if they only pay actual charging costs you are losing out there. Also, it's inherent in the difference between EV and ICE that EV have higher purchase cost but lower running cost, hence if you have paid more to have an EV out of your own funds it's unfair that the company should gain the benefit of the lower running cost. So you could argue that the fair equivalent of the fuel card for ICEs would be to pay the EV drivers some fixed value like 10p/mile for the total mileage of the car (on which you'd be taxed just like you are taxed on the fuel card cost).

 

[NigelT]

However, with the ICE, they are paying for all your fuel including private use, so to an extent the 'win' on the private mileage is covering some non-fuel costs of the business miles and if they only pay actual charging costs you are losing out there.

This is the issue and I think, now I have better facts I know what conversations to have. Thank you

 

[anon37485]

I have a rolec smart charger, it has an app but I have no car to test with yet, I don't know if its realistic or easy to get a monthly value of what the car has consumed from that.

The app does show the last 24hrs, 30 days and 1 year usage and cost, if you set it up with your energy supplier’s prices etc.

I guess you could set yourself a reminder for the 1st of each month, and see the last 30 days usage through the app.

 

[NigelT]

The app does show the last 24hrs, 30 days and 1 year usage and cost, if you set it up with your energy supplier’s prices etc.

I guess you could set yourself a reminder for the 1st of each month, and see the last 30 days usage through the app.

Thank you that’s helpful