TAX INCENTIVES FOR HYBRID AND ELECTRIC CARS

TAX INCENTIVES FOR HYBRID AND ELECTRIC CARS


If your employer provides a vehicle battery charging point to use for your hybrid or electric vehicle, no additional benefit will arise if you use the charging point to charge your company car. The provision of electricity for an electric company car is not regarded as ‘fuel’, even if you use the charged vehicle for private mileage. Therefore, no additional fuel benefit will arise.

Your Tax Shop based in Ashton town centre can advise that if you use an employer provided charging point to charge your own vehicle, the provision of that electricity is taxed as a benefit. Draft legislation (s237a ITEPA 2003) will remove any income tax liability from 2018/2019 for the provision of charging facilities if the facilities are provided to employees generally and as long as the charging points are at or near work.

The exemption for workplace charging has now been published in Finance Bill 2018/19 and will have retrospective effect from 6 April 2018. The legislation is not yet enacted and is therefore subject to change.

The exemption will apply to charging facilities for all-electric and plug-in hybrid vehicles. The charging point can be used to charge a car in which you are a driver or a passenger without triggering an income tax liability.

Finance Bill 2018/19, as published on 7 November 2018, also brings good news for employers. If an employer installs an electric vehicle charging point then this will qualify for a 100% First Year Allowance (FYA). Qualifying expenditure must be made up to and including 31 March 2023 for corporation tax purposes and 5 April 2023 for income tax purposes.

Should you require any further information then please do not hesitate to contact one of the Your Tax Shop team based in Tameside.