HMRC Electricity Reclaim

I have been badgering our compensation people at work regarding reclaiming my electricity charging costs.
Their initial response was that they were waiting on clarification from HMRC.
Guidance issued at the moment seemed contradictory:

'we do not consider electricity a fuel' - hence making reclaim difficult
' you ((the business)) can compensate for what ever it wants' - suggesting I can claim

They have spoken to HMRC today, who have asked me to provide the following information:

Have I got a home charger installed - presumably a 'yes' answer to this would make them more likely to accept a claim.
How have I calculated usage/cost - to which I said 11KwH x 15.5p per unit

I'm hoping to get the approval tomorrow. There is no other logical answer than to approve the claim (I already pay the BiK for my combined lease/fuel card)
I'm hoping it is not a government department, 'computer says no' scenario.

Is it a company car with all fuel provided by the employer?

Yes, company and private mileage paid for.

nick2b said:

Yes, company and private mileage paid for.

Click to expand...

Then your employer can re-imburse you for the electric cost and they will report it as a taxable benefit-in-kind on your P11D and you can make an equivalent claim for 'expenses in employment' on your Self-Assessment tax return as long as you can support the claim with evidence that the cost has been incurred.

As far as I am aware, the fuel benefit, that you already pay tax on, includes all types of fuel (petrol, diesel, electric or chicken manure) so there should be no additional tax due on the electric reimbursement.

HMRC are correct in saying that your employer can reimburse you for anything they like, the real question is; can you claim the expense as being 'incurred in the course of employment'? I would suggest that a cost to run your company vehicle is.

A tax office telephone respondent will probably say anything but will be reluctant to commit to anything. They are overworked, underpaid & just want to get you off the phone & deal with the next caller!

I hope that helps

Yours truly - Bean-counter

Many thanks for taking the time to explain that.
I will pass this info on tomorrow.

Nick

+1

My company does exactly as Red47 says; traditional I've had a company car for 3 yrs fuel inclusive (business & private). Now that the EVs have come along, they have added a field on the expense claim form to allow me to claim kWh x unit price for charging at home, getting the EV charge costs from ChargeVision website. I had BG install my home charge unit several months ago.

have you asked about switching from company paid for fuel, to paying for the all the fuel yourself & getting paid the advisory rate of 16p per business mile?
http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm

Unless you do a lot of personal mileage, i have never found the private mileage tax worthwhile.

Eggtastico

I did 6000 miles in September.....only 1500 were work!

nick2b said:

Eggtastico

I did 6000 miles in September.....only 1500 were work!

Click to expand...

Thats a crazy amount!

Ive worked at places & anyone doing that sort of personal mileage would not be allowed to have private fuel use, let alone a petrol car! (there again, they would not get a choice on what to drive either)

I remember one guy used to moonlight using his company car as an illigit taxi & another who used to travel 400 mile round trip to see his girlfriend every weekend. Which prob would not come anywhere near doing your 6000 miles! but both got their private fuel useage revoked.

I can only guess you're commuting 100miles+ each day to your office, so they would not be classed as business miles.

I used to get private fuel covered many years ago and, looking back, it was a terrible idea for the country and environment. One episode that sticks in my mind was when I wanted a new lens for my camera... I discovered that I could get it £5 cheaper from a store about 150 miles away - so I had a day out!

Got official word back from HMRC today that they currently have no policy which supports reimbursement of electricity charges (even though I have a company fuel card for private and business use).
I'm therefore left with the dilemma of using petrol only (in a very fuel inefficient car) and charging it all on my fuel card or paying for the electricity myself.
This came from HMRC themselves - they even sent me a link to their electric vehicle information page. So unless they have got this wrong, it is at odds with some of the advise on here.
Feels a bit like a 'computer says no' situation. I must add that I haven't spoken to HMRC myself, I have had to do it through the relevant department at work.

Hi,
I currently have a mondeo estate on the company that is funded by the company for fuel as well.
I do approx 1700 miles a month but only 1/3 are business as I mostly based out of the office.
I have had a fairly lengthy run through the best way to get reimbursed for electricity in the new year when i will (hopefully) get a GX4 PHEV.
They did their research and said as long as I can demonstrate that I am only claiming what I use as an expense and keep the supporting information (to show that I am not benefiting just being reimbursed) that it will all be fine. I guess that the easiest way to go about this is to get a metered charging point at home and bill for the units used at my current unit rate from my electricity bill

nick2b said:

Got official word back from HMRC today that they currently have no policy which supports reimbursement of electricity charges (even though I have a company fuel card for private and business use).
I'm therefore left with the dilemma of using petrol only (in a very fuel inefficient car) and charging it all on my fuel card or paying for the electricity myself.
This came from HMRC themselves - they even sent me a link to their electric vehicle information page. So unless they have got this wrong, it is at odds with some of the advise on here.
Feels a bit like a 'computer says no' situation. I must add that I haven't spoken to HMRC myself, I have had to do it through the relevant department at work.

Click to expand...

The HMRC guidance notes say that they do not regard electricity as a fuel, so the rules relating to fuel for vehicles do not apply. I strongly believe that it is simply between you and your employer and the normal rules for expenses apply. If you use your private phone on company business, HMRC will let you charge your employer for the call; if you charge a company car from your home electricity supply, HMRC will not complain if you claim the cost of the electricity as an expense. As with any type of expense, if you claim for things that you didn't purchase, then you are committing fraud and could be in trouble with your employer. If the nature of the fraud also helped you to evade tax, you could be in trouble with HMRC as well!

P.S. it's not a particularly fuel inefficient car for its size - it compares pretty well on petrol alone against similar size petrol only 4WDs

I dont mean this to be sound harsh, (it reads harsh to me!)

But my guess is you went for the PHEV because of the 5% BIK
With the amount of mileage you do, IMO the PHEV isnt for you.

There is a thread where we had this discussion about people only going to opt for the PHEV because of the 5% BIK.
I dont blame Company Car drivers for doing so.

Once your doing 200 miles a day, then the Diesel Outlander is supposed to be better on Fuel economy compared to the PHEV

Anyway.. all may not be lost!

Is it possible that you can work out how much electric you are spending charging the car & maybe ask your employer to offset it as a 'contribution' to the private fuel use side of things. This should lower your Tax for Private Fuel.

Nick2b, is this the link that HMRC sent to you? (I've posted this on here before).

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/315604/factsheet-tax-implications.pdf

If so I would suggest that you/your employer go back to HMRC and ask for a dispensation for claiming the electricity costs on the basis that, as per para. 5.5 of their guidance, your employer considers it a "trivial benefit".

No, I don't think so.

This was the link that our Compensation Dept posted me:

http://www.hmrc.gov.uk/manuals/eimanual/EIM23900.htm

And this is the accompanying note:

Further to your email regarding reclamation of home electricity costs for
your company car. I can confirm that based on current HMRC regulations, the
cost of electricity is not presently allowable due to it's current
categorisation of not being a fuel for car fuel benefit purposes.

HMRC have provided us with the following link, which takes you to the
relevant section of the Employment Income Manual.
http://www.hmrc.gov.uk/manuals/eimanual/EIM23900.htm

At present xxxxx Ltd doesn't have a policy on electric recharging,
therefore we will reflect HMRC guidelines. As a result of this, only your
petrol fuel can be reimbursed or bought on the fuel card provided.

Should you have any further questions, please don't hesitate to get in
touch.

I would definitely challenge them on that as I think they have misinterpreted the guidance. Just because the provision of charging (under the circumstances defined) does not constitute provision of a 'free private fuel benefit', does not mean that you cannot reclaim the cost of charging, especially if you are already being taxed for free private fuel.

All that guidance says is that if you only get free charging as described, you don't have to pay the private fuel BIK tax.