With the rapid shift to electric vehicles (EVs) in the UK, many homeowners are now installing EV charging points on their property. This allows convenient overnight charging at home. But what tax relief is available when installing a home charging point? Can you reduce your tax bill through capital allowances? Let’s take a detailed look at the tax implications.

Covering VAT, Capital Allowances and Other Reliefs

This guide will cover VAT implications, capital allowances you can claim, and other tax reliefs when installing an EV home charger. With the right planning, you may significantly reduce costs through tax savings. We’ll also look at tax relief differences when installing workplace vs home charging.

VAT Relief on Home EV Charging Points

Firstly, you can reclaim VAT on a home EV charger’s purchase and installation costs. This provides an immediate saving of 20% of total costs. To claim the VAT refund, keep all receipts and invoices. Then reclaim VAT through your next self-assessment tax return. Just enter purchase and installation costs as an expense. HMRC will refund 20% of these expenses as VAT relief.

Capital Allowances for Home EV Charging Points

You may also be able to claim capital allowances which provide tax relief on capital expenditure. This includes the costs of buying and installing equipment in your home when used for business purposes.

For an EV home charging unit used by a sole trader or partner, 100% of expenditure qualifies for capital allowances. Claim through the Annual Investment Allowance (AIA), which provides full tax relief in the year of purchase. If costs exceed the annual AIA limit of £1 million, claim writing down allowances instead. These allow relief at 18% per year on a reducing balance basis. If you run your business from home, capital allowances can significantly reduce the costs of installing a home EV charger.

Other Tax Reliefs

You may also qualify for additional tax relief when charging a company car at home. Where you charge a company EV, keep records of business vs personal mileage.

You can then claim tax relief on the proportion of electricity costs for business mileage. Reimbursed electricity costs also qualify for tax relief based on business mileage. Alternatively, claim capital allowances for the full EV charging costs. Then add a taxable benefit on your tax return equal to private use.

Key Points on Home vs Workplace EV Charging Relief

Companies can claim 100% capital allowances tax relief when providing electric charging at work. But employee use does not create a taxable benefit if available to all employees.

For home charging, sole traders can claim capital allowances based on business use. But employees can’t claim tax relief on costs reimbursed by an employer. The key difference is that home electricity costs are a personal expense for employees. But workplace charging is a business expense for employers.

Maximising EV Charging Point Tax Relief

With the right planning, you can maximise tax relief on installing an EV home charging point. Reclaim VAT on all costs and claim capital allowances based on business use. For company car users, keep mileage records to claim tax relief on business charging costs. Taking advantage of all available tax breaks can make installing a home EV charger much more affordable. And with Government grants also available, now is a great time to switch to electric vehicles.

Consult our tax advisors for assistance determining what expenses are deductible and how to calculate and claim them on your tax return.