As electric vehicles gain popularity in the UK, questions about the financial aspects surrounding EVs are on the rise. One topic, in particular, is stirring many questions from the UK public. And that’s Value Added Tax (VAT) – an essential part of any vehicle purchase or leasing process.
Whether you’re a UK resident, company or finance guru, you may be wondering about the rules of Value Added Tax (VAT) on electric cars – asking questions such as: Is there VAT on an electric car? Can you claim VAT back on electric cars for personal use? And can a company reclaim VAT on electric vehicles?
Keep reading to find out everything you need to know about EV tax and how, if applicable, you can reclaim VAT on your EV.
All vehicles follow the same VAT rules in the UK. And despite exemptions from other charges, such as road tax, electric cars are unfortunately no exception to VAT. In 2023, any purchase or leasing of an electric car will be charged VAT of 20% – no matter whether the electric vehicle is fully electric or a hybrid.
But while the 20% VAT rate is the same on all vehicles, VAT on electric cars can be reclaimed in certain circumstances. Let’s get into them.
Unfortunately, you can’t claim VAT back if you purchase or lease a new electric car for personal use.
Yes, a company can reclaim VAT on new electric cars if the vehicle will be used for purely business purposes and not personal use, according to HMRC – so long as your company is VAT registered.
In fact, VAT is reclaimable on all cars – whether petrol, diesel or electric, so long as they are new and for business use only. But it’s important to note that commuting to and from the workplace counts as personal use, and you couldn’t be able to reclaim for this.
To claim VAT back on your commercial vehicle, the company will have to demonstrate that the electric vehicle will not be for personal use – such as providing employee contracts.
Whether the electric car is leased or purchased outright can affect the VAT reclaim amount. But in short, yes, a company can reclaim VAT on leased electric cars – although not the full amount.
Leasing agreements have different VAT implications compared to purchasing an electric car outright. In terms of specific numbers, HMRC states that typically 50% of VAT on a leased car can be reclaimed – unlike the 100% on a new car.
But, similarly to the purchase of new EVs, the leased car needs to be for business use only.
Not only do electric vehicles for business provide a plethora of benefits for your company, such as cheaper running costs and benefit-in-kind costs, but installing commercial electric vehicle chargers provides numerous advantages for businesses. Charging an electric vehicle at your commercial or workplace is significantly cheaper than charging at public charge points.
EV chargers also engage customers and potentially generate revenue while preparing for the future EV market. For fleets, EVs lower costs and installing chargers ensures their support. Additionally, there are environmental benefits, including reduced emissions and air pollution.
At We Power Your Car, we can install EV chargers for homes, fleets, workplaces and commercial properties. As an experienced, accredited supply and installation company, we are rated ‘Excellent’ on Trustpilot and five stars on Google.
If you need more information, please feel free to call us at 03333 44 96 99 or fill in the contact form below. Our lines are open seven days a week, including bank holidays.
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This type of electric charger has it's own cable to charge your car.
This type of electric charger requires a seperate cable to charge your car.
Spread over a 60 month period.
Tenants and homeowners are eligible for finance.
You decide the amount of months.
Minimum of £1000.
We will contact you to process the credit application. Approval is subject to application, financial circumstances and borrowing history. 13.9% APR representative. T&Cs apply.
Your order is not confirmed until your application has been approved.
We lay SWA cable laid at 600mm deep, with a protective cable warning tape laid 150mm above the cable. These are laid on a sand or sifted sand soil bed then backfilled.
We position overhead cables at a minimum height of 3.5m and are run along a catenary wire. The cable run should not be accessible to vehicles.
Our instant price is fixed if it falls within our standard installation package plus any additions that you have selected (extra cabling for example). This package covers the majority of homes in the UK. Before we undertake your installation we will carry out a digital survey to check that nothing has been missed. After reviewing the survey results some additional work may be required in order to complete your installation safely and to the required standards. If this is the case, we will contact you well before the installation date and advise the cost of any required work. You can then continue with your installation, or alternatively we will refund you in full if you do not want to proceed.
Included in our standard installation is :
• Fitting of a single phase charge point to a brick or plaster wall or other suitable permanent structure
• Up to 10 metres of cable, run and neatly clipped to the wall between the electricity supply meter / distribution board and the charge point.
• Routing of the cable through a drilled hole in a wall up to 500mm (20 inches) thick if this is needed.
• The fitting and testing of electrical connections and protections required for the charge point.
• An additional three way consumer unit, if required
• Installation of a Type A RCBO in an RCBO enclosure
• Up to 3 metres of plastic trunking to conceal interior wiring.
• An O-pen earth protection device if the charge point requires it. (This is NOT an earth rod)
• Up to 4 hours of labour from your installer to complete the work.
• Electrical testing of the whole installation.
• Handover and setup of the charge point and any app that may be needed.
Not included in our standard installation (additional work) :
• Where the installation requires additional cabling over and above the amount you have told us about.
• Upgrade/replacement of the main incoming supply fuse where the local DNO (eg Northern Powergrid) would need to attend site.
• If the charge point is to be mounted on a post/pedestal rather than an existing wall and where you have not selected a post as an extra cost option in your order.
• Installation of a charge point to a three phase supply.
• Where gas and water mains bonding (earthing) is not in place at your property. If this is not in place, additional work would be required before installation of the charge point.
• Any groundwork that has not been selected during the order process.
A Surge Protection Device is not included in our standard installation.
What else you need to know :
• On the day of installation, please ensure that the area around your consumer unit (fuse box), incoming electricity supply meter and proposed charge point location (including where the cable is expected to be run) is clear and free of obstructions.
• We will need your WiFi password as part of the installation process in order to connect your charge point to the internet. Please have this available for the installer. Details will not be kept.
• The charge point must be on your own designated off road parking.
• The charger will be fixed in line with current guidelines at a height where it cannot be hit by a vehicle.
• Our installers are not able to enter loft spaces; lift floorboards or flooring; take apart any furniture of work above a height of 2m. If you anticipate that any of this may be required, then please contact us and we can discuss in more detail and provide you with a quotation.
• Should there be extreme weather conditions our installers may not be able to continue with you installation if it is not safe to do so (for example flooding). They will always do their best to complete the work where they can.
If you have any questions then please contact our customer service team who will be happy to help. Please also read our terms and conditions.