Can businesses claim back VAT on EV public charging?

If your Business has an electric vehicle fleet - or is looking to transition its existing fleet to electric - then you might be searching for ways to save money on charging using the public network.

The good news is that there are quite a few ways to reduce your EV fleet charging costs (check out our blog on reducing your fleet charging costs here!), but for now, we’re going to focus on how businesses can claim back VAT when charging using the public charging network.

Let’s get plugged in…

Which businesses can recover input tax for charging electric vehicles?

Lucky for some businesses, there is a way to recover all input tax/VAT for charging electric vehicles. According to HMRC, if all of the below points apply to your business, then this includes you:

• you are a sole proprietor

• you charge your electric vehicle at home

• you charge your electric vehicle for business purposes

What if you/your employees charge an electric vehicle for both business and personal use?

If you, or your employees, use electric vehicles for both business and personal use, then receipts or a record will need to be kept to distinguish the amount of use between business and personal.

According to the HMRC:

“You can recover the full amount of VAT for the supply of electricity used to charge the electric vehicle. This includes the electricity for private use. However, you will be liable for an output tax charge on the amount for private use. This is because a ‘deemed supply’ has been made. Alternatively, you can recover VAT on only the business element. The usual input tax rules apply.”

How much is VAT on charging?

The VAT rate for charging vehicles at a public charge point is 20%.

The VAT rate for charging vehicles at home is 5%.

Depending on where you charge your electric vehicle, the above rates will apply when claiming back VAT on charging.

What are the other ways to reduce EV fleet charging costs?

Use Octopus Fleet!

• With Easy RFID card management, customisable reporting, one monthly consolidated invoice (& more!) Octopus Fleet is the best way to streamline your fleet's public charging with access to the award-winning Electroverse. You can track where drivers are charging up and spot patterns to help make decisions on future charging behaviours.

Take advantage of dynamic pricing and discounts

• Make sure your drivers are aware of when pricing rates are lower during the day and discounts with Electroverse. For instance, Osprey has 20% off their daily rates with Electroverse from 7 - 11pm, there’s also 40% off at IONITY if you subscribe your drivers, plus more! 

Make sure you’re aware when charging pricing drops

• Heard of Plunge Pricing? You should! It’s not your average discount; it's a revolutionary approach tied to energy supply, demand, and wholesale prices, designed to pass through the cheaper costs when demand is low and supply high. This means that on any given day prices can drop on select networks by a substantial amount -  in fact, on one of our Plunge Prices there was a 45% discount on select networks. To learn when Plunge Price days are happening, simply turn on app notifications!

Look out for EV fleets incentives and grants

• From government grants on installing workplace chargers to workplace charging schemes, there are plenty of ways to reduce the running costs of your electric fleet.

To learn more about reducing EV fleet charging costs, check out our blog: A guide to saving money with Octopus Fleet.

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