A home, a garden... and a pole. Electric company cars are no longer trendy but standard and are being promoted via a tax break. A good thing for the climate, of course. However, the question does arise as to where everyone should charge their cars in the future and who will pay for the charging costs or compensation. In many cases, this can be very overwhelming.
Pay what you charge
The ambiguity over who pays for what costs creates friction in implementing a smooth green company car policy, according to tax specialists.
One of the options for employers at present is to pay a flat-rate allowance to employees who charge their cars at home. This is precisely where the shoe pinches. The electricity flowing from the pole to the car is tracked, but actual costs of that electricity are not tracked.
The result is a complex tangle of different employer and employee energy contracts from which it is almost impossible to deduce exactly how much the refund should be.
The tax authorities obviously want an exact reflection of the costs incurred that come with the company car. If there is an overpayment, benefit in kind must be paid, and that payment quickly adds up.
Reimbursement and benefit in kind
As an employer, you can refund electricity costs in full without the benefit in kind increasing. This can be done in several ways:
A slightly more complex way is to revise the refund rate monthly based on average energy prices at the time.
Fixed rate per KwH
Electricity costs are volatile, which is precisely why it is impossible to set a reimbursement rate per employee. However, a possibility is to define a rate between 25 and 30 cents in your e-car policy.
Charges and corporation tax
Electricity costs are 100% deductible in corporation tax for companies. The same applies to the charging costs of charging stations at your employees' homes, but the VAT recovery is different. Part of the VAT (6%) is considered a private cost and not a business cost.
The lump-sum allowance is intended as a temporary option and additional taxes can be avoided by meeting certain conditions. For example, the home charging station must be smart (able to record usage) and owned by the employer. There is then a choice of two options.
- SPLIT BILL
Separation of charging costs and personal electricity consumption.
- COSTS NOTE
As an employee, you pay the expenses yourself and write out a monthly expense report to your employer.
Use a charging card at a charging point of your choice. Charging stations are increasingly present in our public environment and in many municipalities you can also apply for one to be installed in your neighbourhood on public roads.
In addition, there are already many fast-charging points along the motorways, and of course you can always charge without any problems in the company car park. With a charging card, the company that provides the charging card keeps all the records neatly for yourself and your employer.
Not feeling like having a headache? Contact us with all your questions.