VAT on electric vehicles and home charging

In 1973 when VAT was introduced to the UK the then government referred to it as a simple tax. It is true – the concept is simple – but in practice it is anything but and made worse by confusing and contradictory HMRC briefs. A word to the wise: HMRC booklets are not statutory have no statutory weight and are ignored by judges.

The basic HMRC guidance in relation to VAT and electric vehicles (EVs) is set out in VAT Notice 700/64: Motoring expenses. Input VAT recovery is summarised concisely at section 5.4 ‘Recovering VAT on other motoring expenses’:

‘The VAT you incur on all other business motoring expenses (perhaps fleet management charges or parking charges) is input tax and recoverable subject to the normal rules. The VAT guide (Notice 700) and Notice 706: Partial exemption give more information.’

The normal rule is that if a...