Company car with personal mileage allowance

[Muzzer79]

I have an employee, recruited before I joined.

They live quite some distance from the office, so it was agreed that their 'personal mileage' would be covered, so they are not out of pocket by travelling to said office.

They have also been promised an electric company-supplied car, thereby limiting BiK exposure.

If it were an ICE car, we would simply source and issue a fuel card and allow them to use it for personal miles.

However, how does this generally work with EV's? AIUI, HMRC doesn't recognise electricity as a fuel, so there is no BiK on it.

In terms of recompensing for personal miles, how do we therefore do that?

[StevieBee]

Not what you're asking I know but unless anything has changed, payments made by the employer to the employee for travel from home to and from a permanent place of work is taxable which would apply regardless of the fuel used to do so.

[Ean218]

StevieBee said:

Not what you're asking I know but unless anything has changed, payments made by the employer to the employee for travel from home to and from a permanent place of work is taxable which would apply regardless of the fuel used to do so.

The whole point of the BIK fuel charge on company cars is to cover personal usage so the above is incorrect.

For electric company cars where the fuel BIK is zero then zero is the figure you use on the P11D.

[MaxFromage]

StevieBee said:

Not what you're asking I know but unless anything has changed, payments made by the employer to the employee for travel from home to and from a permanent place of work is taxable which would apply regardless of the fuel used to do so.

It's recently changed, so now an employer can reimburse an employee for ALL electricity use on a company electric vehicle.

https://www.icaew.com/insights/tax-news/2023/sep-2...

[MaxFromage]

Muzzer79 said:

In terms of recompensing for personal miles, how do we therefore do that?

You have a number of choices:

https://www.icaew.com/insights/tax-news/2023/sep-2...

[the cueball]

Also watch if your business is VAT registered.

You cannot reclaim the VAT if the car is charged at home and you repay the employee.

You can only reclaim the VAT on the business portion of the charge, not the private.

https://www.gov.uk/government/publications/revenue...

[Muzzer79]

MaxFromage said:

Muzzer79 said:

In terms of recompensing for personal miles, how do we therefore do that?

You have a number of choices:

https://www.icaew.com/insights/tax-news/2023/sep-2...

Excellent, thank you