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Uk Company Car Expense Help

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Hi,

I've just moved to a new employer and have a model 3 as company car. The car is leased by my employer so they cover all the costs for it, I just charge at home and then charge when out and about, using my own credit card.

They've said to me that the advisory mileage rate for electric cars is 4p per mile and that's what they'll pay, but on the first journeys I've done I have to use a significant amount of supercharging, which 4p per mile doesn't get close to covering. I did 417 miles over two days last week and the actual cost was close to £35, and I'd only get £17 back at 4p.

Does anyone have any experience from the same situation and what agreements they have in place? Should I claim 4p per mile up to any supercharge and then just claim for the cost of the charge outright? Would be good if anyone has been in the same situation and can advise how to get around it, as I can't afford to fund 50% of business mileage myself.
 
There are tax implications if they re-imburse over the HMRC advisory rate. If you do the majority of your charging at superchargers then you'll be out of pocket. Conversely, if you do the majority of your charging at home on an overnight tariff you'll be massively ahead (with no tax liability).

A colleague of mine had a similar(ish) problem with ICE cars - living in Scotland and working in Manchester, he was given a hire car each week. The MPG in central Manchester is, of course, parlous and he was massively out of pocket on miles payable against cost of fuel. He was advised to "round up the miles to cover the cost" which he wouldn't do because that's fraud, whoever tells you to do it. But the option of expensing the fuel (like, in your case, expensing the SC) was excluded on the basis of HMRC rules (because however it's done, paying over their advisory rates is considered a "benefit" and is taxable, even if it's just covering actual costs incurred - stinks doesn't it).

In his case the only way he could avoid being out of pocket and keep HMRC happy was to get taxis - everybody loses. Obviously your case is different, but the HMRC intransigence is the same. Over time, can you charge mostly at home, or on cheaper destination chargers?
 
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The advisory rate is just the max that HMRC will accept without question. If your average costs are genuinely likely to be be over 4p then there is nothing to stop your employer paying a higher rate or you giving them the actual cost and them paying that. The only issue is it may be necessary to justify it to HMRC which should not be hard to do but your employer may not want the hassle of doing it but if it is leaving you significantly out of pocket then its a conversation you need to have with them
 
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4p is the correct advisory fuel rate for a company financed car (for an EV) and as has been stated above, this is just the amount that HMRC say your company can pay you 'tax free'. They are able to pay more than 4p, but for every penny over that they pay, you are liable to tax (at your rate) - most likely reported on a P11D at the end of the year. The advisory fuel rates for petrol/diesel cars are not that high (eg. for a 2,000cc petrol car you are looking at about 12p per mile) - these are updated quarterly to try and keep them 'relevant'. The intention is that they 'just about' cover the cost of fuel, and from the work I did on looking at the savings between petrol and electric, they look about right (I was seeing about 14p for my petrol car, 3.5p for my Tesla).

As someone stated above, if you use Superchargers all the time, you'll likely be out of pocket - just like you would if you filled up mostly at motorway service stations with petrol.

FYI - 45p per mile (up to 10,000 miles and 25p after that) is the amount you can claim before tax if it is your own car, and that is intended to contribute to wear & tear, insurance and the like as well as fuel.

Hope that helps.
 
Hi guys,

Thanks for the replies, really helpful and appreciate the response. Obviously not good news but helpful to know that it's correct and there isn't really an alternative I can look at. Stops me butting heads with HR!

I'm going to have to try to keep supercharging down to a minimum, I live in Stamford and head office is Newcastle, and have to be up here a fair bit as we're a manufacturing site. I'll just have to try and use trains when I come up here until they get charge points installed (apparently two are getting put in this year). Most of my other journeys will be covered more or less by home charging or just a small amount of SC so should be ok on other occasions.

Just seems HMRC are miles off with the advisory rate, given that a lot of business mileage will rely on using charge points. When EVs become more and more commonplace this will become a major issue, as we'll have a charging network that everyone will be desperate to avoid to stop being out of pocket.
 
I had a similar discussion, it's down to how the legislation is worded (although can't remember the specifics as was a few years ago).

Although I could only claim 4p I'm pretty sure I was told I could claim the remainder of the 45p/mile value back from HMRC. So if you submit your own tax return it'd be easy to claim it back then.
 
If you get paid less than the approved rate (be that the 4p or the 45p) you can claim the tax back on what you should've been paid (the difference). However, you can't claim back tax on what you aren't 'allowed' to have by HMRC, that is why there is a distinction on mileage for private cars and company cars.
 
4p is the correct advisory fuel rate for a company financed car (for an EV) and as has been stated above, this is just the amount that HMRC say your company can pay you 'tax free'. They are able to pay more than 4p, but for every penny over that they pay, you are liable to tax (at your rate) - most likely reported on a P11D at the end of the year. The advisory fuel rates for petrol/diesel cars are not that high (eg. for a 2,000cc petrol car you are looking at about 12p per mile) - these are updated quarterly to try and keep them 'relevant'. The intention is that they 'just about' cover the cost of fuel, and from the work I did on looking at the savings between petrol and electric, they look about right (I was seeing about 14p for my petrol car, 3.5p for my Tesla).

As someone stated above, if you use Superchargers all the time, you'll likely be out of pocket - just like you would if you filled up mostly at motorway service stations with petrol.

FYI - 45p per mile (up to 10,000 miles and 25p after that) is the amount you can claim before tax if it is your own car, and that is intended to contribute to wear & tear, insurance and the like as well as fuel.

Hope that helps.
this is the amount that they can pay tax free below which HMRC are unlikely to ask for proof. If you are paying more and have receipts there is nothing to stop you claiming more, the company paying it and it not being a benefit in kind. Nothing wrong with expensing the supercharger costs so long as you don't also claim those miles.
But if you are doing a lot of your miles on home charging over night at 5p on say Octopus it may average out in which case don't worry about it. And driving electric is saving you thousands in company car tax at the moment as well of course.
 
There is another way of doing this, if the cost and use of third party charging is prohibitive.

You can reclaim the actual cost of charging from the company for the business miles. So Supercharger, third party charger, home electricity.

You then repay the company 4p a mile for your private miles.

Most don't opt for this option as it's a load of hassle in recording mileage and charging costs. But for the organised.....

It's just the opposite of what is discussed in the thread - if you do this then the company are paying for all the charging of the car, but there are no tax implications on your private journeys as you are reimbursing the company for the electricity at the AER.
 
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I had a similar discussion, it's down to how the legislation is worded (although can't remember the specifics as was a few years ago).

Although I could only claim 4p I'm pretty sure I was told I could claim the remainder of the 45p/mile value back from HMRC. So if you submit your own tax return it'd be easy to claim it back then.
This seems to be a confusion between the AER (advisory electricity rate), with AMAP (approved mileage allowance payment).

The only way this would work is if your company AMAP was 4p, then you could claim the remainder on your tax return up to 45p.
 
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I really do not know much about what I am about to throw in but as a conversation starter here goes...I believe you can charge at your place of work without it being taxable. So if you travel between "sites" can you charge this way. The company would have to install some chargers.
 
I was instrumental in getting Tesla's on to the scheme at the big corporate I work for. We reimburse at 7p for fleet drivers, as all the cost models showed that the 4p was ridiculous for any charging don't away from home.

Electricity is not deemed a fuel, so not a taxable benefit if provided to you at the employer's workplace.
 
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I'm new to this. Can the company not pay for supercharging with a company card for work related journeys?
Not really without it being taxable. Some have tried to interpret tthe regs as the employer can pay for charging, but this is only on a workplace charger or public car park at the workplace.

The issue with all this is a, vastly variable costs depending on charging at home and public charging, and b, accounting for business mileage v private mileage. Start with a half full car charged at home, some of it on a cheap offpeak tariff, some at a more expensive tariff. Drive 350 miles on business, fill up at a free council destination charger, then later at a supercharger, some of it on referral miles, get home with 2/3 full. As a driver you'd want to get the sueprcharging costs back, but the electricity you used was the home etc... (I'm sure you can think of mutlipe permutations). The tax man is also thinking they've already given company car drivers massive tax breaks and anybody that doesn't take an EV at 1% BIK saving them hundreds every month because occasionally they are £5 down on a business trip are over thinking it if you ask me.
 
Not really without it being taxable. Some have tried to interpret tthe regs as the employer can pay for charging, but this is only on a workplace charger or public car park at the workplace.

The issue with all this is a, vastly variable costs depending on charging at home and public charging, and b, accounting for business mileage v private mileage. Start with a half full car charged at home, some of it on a cheap offpeak tariff, some at a more expensive tariff. Drive 350 miles on business, fill up at a free council destination charger, then later at a supercharger, some of it on referral miles, get home with 2/3 full. As a driver you'd want to get the sueprcharging costs back, but the electricity you used was the home etc... (I'm sure you can think of mutlipe permutations). The tax man is also thinking they've already given company car drivers massive tax breaks and anybody that doesn't take an EV at 1% BIK saving them hundreds every month because occasionally they are £5 down on a business trip are over thinking it if you ask me.



Try using that calculator selecting company owning the car and employer paying all the electricity. It says there's nothing to report. No distinction between private or business, home or supercharging. With an employee owned car that equation changes. As I said I'm new to this and I will get advice from the accountant before proceedings but as far as I can see using company for supercharging costs and home charging for personal costs may be a happy medium.
 


Try using that calculator selecting company owning the car and employer paying all the electricity. It says there's nothing to report. No distinction between private or business, home or supercharging. With an employee owned car that equation changes. As I said I'm new to this and I will get advice from the accountant before proceedings but as far as I can see using company for supercharging costs and home charging for personal costs may be a happy medium.
I've read so muich conflicting adevice on this you may be right. The last thing I read explcitily excluded charging away from home or the office from a specific tax/BIK exemption. They like to make it confusing for EVs.