HMRC corrects guidance on company-owned EV car charging
Occasionally, HMRC publishes guidance that is at odds with what the legislation says. A recent example of this is in respect of reimbursement for the costs of charging company-owned electric vehicles. What’s the full story?
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HMRC clarifies treatment of averaging relief under MTD IT
HMRC has updated its guidance to explain how averaging relief claims will operate under Making Tax Digital for Income Tax (MTD IT). The clarification addresses concerns about how farmers and creators will claim relief once quarterly reporting becomes mandatory. What has changed?
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Double up on the employment allowance
You’re the sole shareholder of a limited company which employs several members of staff. You’re working on plans to start another business with an ex-colleague. Can both businesses benefit from the full employment allowance (EA)?
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VAT cut for children's holiday activities over summer
The government has announced a temporary reduction in the rate of VAT applying to certain children's holiday activity programmes during the summer holidays. The measure is intended to help families with childcare costs during the school break. What has changed?
The tax and NI rules surrounding wholly electric vehicles (EVs) are more generous than for other company cars. This treatment extends to reimbursement of costs incurred by an employee in charging the EV. However, until recently HMRC’s guidance stated that where an company-owned EV was available for private use, any reimbursement is taxable as earnings. But this is inconsistent with a specific exemption in the legislation. There is also currently no specific fuel benefit for EVs, as HMRC does not consider electricity a fuel.
HMRC’s guidance at EIM23900 has now been updated to make clear that “The exemption under s.239(2) ITEPA 2003 means there is no separate charge to tax under the benefits code where an employer reimburses an employee for the cost of electricity to charge their company car at home.” The NI position is the same. However, HMRC does state that employers must ensure that the reimbursement made towards the cost of the electricity is solely for the company car.
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