Unfortunately HMRC does not consider the cost of charging your electric or hybrid car to be a fuel expense.
So what expenses can you claim if you use an electric or hybrid car for business travel?
Travel expenses for electric or hybrid cars:
Well what expenses you can claim depend whether or not you are paid a car allowance from your employer, or by your company.
Car allowance paid
Electric car
If you are paid a car allowance from your employer, or by your company, then you can claim expenses based on one of the following methods:
- Claim the relevant fuel advisory rate based on the lower of the petrol or diesel tariff as per HMRC's guidance (see here)
- Claim the calculated cost of the electricity used from a domestic supply to charge the car
- Claim a rate that can be calculated accurately as the true cost to you
Hybrid car
If you are paid a car allowance from your employer, or by your company, then you can claim expenses based on one of the following methods:
- Claim the relevant advisory fuel rate or the approved mileage allowance payments based on the petrol or diesel engine
- Claim the first 20 to 30 miles of each trip using the cost of the electricity then pay the full advisory fuel rate for the remaining trip
- Claim a combined figure of the electric vehicle and advisory fuel rate that can be audited fully
- Claim a rate that can be calculated accurately as the true cost to you
No car allowance paid
If you are not paid a car allowance from your employer, or by your company, then you can claim expenses based on one of the following methods:
Electric car
- Claim the approved mileage allowance rate which is the same for all cars
- Claim the approved mileage allowance, less the advisory fuel rate, plus the calculated cost of the electricity used from a domestic supply to charge the car
- Claim a rate that can be calculated as accurately as your true cost as possible
Hybrid car
If you are not paid a car allowance from your employer, or by your company, then you can claim expenses based on one of the following methods:
- Claim the approved mileage allowance rate which is the same for all cars
- For the first 20-30 miles of each trip, pay the approved mileage allowance rate less the relevant advisory fuel rate, then add the pence-per-mile cost of the electricity. Then pay the full approved mileage allowance rate for the remainder of the trip
- Claim at a rate that can be calculated accurately as your true cost
In all of the above cases, it's very important to ensure that you have accurate and detailed business records to substantiate your claim should HMRC raise any queries.
Our eBooks cover this and many other topics. Check them out here.
And if you'd like to know how we can help you with all of this, or with anything else, feel free to give us a call on 01202 048696 or email us at [email protected].