Claiming mileage for electric cars
Electric car drivers are often confused about what type of fuel their vehicle uses. This is because it depends on where you live. In some areas, electricity is cheaper than gas, while in others, it isn’t. So, if you want to claim tax relief for your electric car, you’ll need to know which area you’re in.
The UK government introduced a new system for calculating the amount of tax relief motorists receive for driving electric cars. Previously, people had been able to use the old system, which allowed them to claim up to £4,500 worth of tax relief per year. However, since April 2017, the new system applies to anyone buying an electric car regardless of where they live.
In addition to the new rules, electric cars are now eligible for a different rate of tax relief depending on where you live. If you buy an EV in England, Wales or Northern Ireland, you’ll be entitled to the standard rate of tax relief. But if you buy one in Scotland or parts of London, you’ll be able to take advantage of the low rate.
If you live outside of the UK, make sure you find out whether you qualify for the low rate of tax relief. You can do this by contacting your local HMRC office. They’ll tell you if you qualify and give you the relevant form. Once you’ve filled it in, send it to the address listed on the form.
You’ll need to provide proof that your car meets the requirements for the low rate of relief. For example, if you bought your car in the EU, you’ll need to show evidence that it’s a plug-in hybrid.
Corporate mileage rates for electric vehicles
The European Commission announced new rules for reimbursing public transport operators for the use of electric cars. Under the new rules, companies providing electric cars are eligible for reimbursements. This includes hybrid cars. However, hybrids are excluded from the reimbursement scheme because they do not meet the requirements of being environmentally friendly.
Hybrid cars are cheaper to run compared to petrol or diesel cars. They produce less emissions and are better for the environment. In addition, they emit fewer pollutants during braking. For example, the average fuel consumption of a Toyota Prius is 4.2 l/100 km while the average fuel consumption of an Audi A3 TDI is 8.4 l/100 km.
For electric vehicles, the mileage rates depend on the vehicle type and capacity. There is a mileage rate for every engine size. Companies should consider the cost associated with running a fleet of EV before adopting them.
Can employees claim reimbursement for charging a corporate vehicle at home?
HM Revenue & Customs (HMRC) says it treats electricity used for business trips as an expense, rather than a benefit-in-kind. This means it does not count towards the annual allowance for business travel. However, some companies are treating electricity used for business miles as a benefit-in-Kind (BIK). They include:
• Amazon – employees can claim the flat AERC of 5p permille for business travel
• Apple – employees can claim the BIK of £5 per day for business travel
• Facebook – employees can claim the BAK of £10 per month for business travel
• Microsoft – employees can claim the BIK of £20 per month for business travel.
The government says that employees cannot claim for charging accompany car at home. However, there are exceptions to this rule. For example, employees can claim for charging a company vehicle while working away from home.
What are the guidelines for claiming mileage on privately owned automobiles?
AFR rates apply to all business travel taken in company-provided vehicles. If you use a privately-owned vehicle, it’s important to understand how much mileage you can claim. This applies to both personal and business use, including driving to work.
For privately owned vehicles, the American Automobile Association (AAA) provides a Mileage Rate Calculator that helps determine what type of car insurance policy is best for you. You can find out more about the AAA Mileage Rate Calculator here.
If you use a privately-own vehicle, you could be eligible for additional coverage under the American Automobile Association’s Auto & Home Insurance program.
What are the mileage rates for privately-owned electric vehicles?
Private drivers can now claim an extra 5 pences per mile allowance for passengers traveling in their car. This applies to journeys up to 150 miles. There is no limit on how many people you can take along.
Business trips in privately owned cars will be taxed at 45 pence a kilometer. Currently, this is charged at 20 pence per kilometer for those driving alone, and 35 pence per kilometer when there are multiple occupants.
Electric vehicles are exempt from road taxes. They are already exempt from fuel duty.
What are the guidelines for paying mileage taxes?
Taxpayers who don’t pay National Insurance (NI) must record any business miles travelled in an HM Revenue & Customs (HMRC) logbook or other approved systems. They can then reclaim half the amount paid out as taxes. However, employers can claim back half the money paid out in NI contributions from their employees.
Employers must deduct the cost (fuel costs, toll charges etc.) of fuel used in the process of carrying out duties from taxable income. This is known as “taxable mileage”. If you’re self-employed, you’ll also need to keep records of how much you spend on petrol and diesel.
The government introduced the rule change in April 2017. Prior to this, taxpayers could choose whether to use the standard mileage rates or the actual cost of travelling. In addition, there was no requirement to keep track of the miles you travel.
Frequently Asked Questions
Does the government offer electric vehicle grants?
The government offers grants for people purchasing electric vehicles. Transport Secretary Grant Shapps told MPs he wants to “make sure we don’t miss out on opportunities to help people buy electric cars.” He added that the government will look into how it can support the uptake of electric vehicles.
For cars, the maximum grant offered is £3,500. This is deducted by the dealership or manufacturer at the point-of-sale. The grant cannot be applied towards second hand vehicles, however there are grants available for van and motorcycle purchases.
Can I still claim mileage charges for my hybrid or electric vehicle?
HMRC say you can still claim mileage expenses for business trips taken in your own vehicle, even if it isn’t driven solely by you. However, there are some differences in how the taxman treats mileage claims depending on whether the car is owned by yourself or another person. If the car belongs to you, you’ll be able to claim mileage expenses regardless of whether it’s an electric or petrol car. But if the car is someone else’s property, you won’t be allowed to claim mileage expenses unless it’s a hybrid or electric car. This rule applies to both public transport and private vehicles.