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One of the key reasons for this mass migration to EVs is the availability of financial incentives and reclaiming the vat

No matter where you call home, you won’t have to worry about paying road taxes, business car taxes, or congestion fees on your electric vehicle.

And what about VAT, the other “very annoying tax”? Learn about the value-added-tax (VAT) implications of driving an electric vehicle and charging an EV, as well as other cost-cutting measures, in this article.

vat on the electric vehicle

Even though sales of electric cars haven’t reached a tipping point yet, growing interest from both consumers and businesses shows that this revolution is already well underway.

The Society of Motor Manufacturers and Traders (SMMT) says that from September of last year to September of this year, sales of electric cars (including both all-electric and hybrid models) doubled. Twelve-and-a-half thousand (9.5%) were completely electrified.

The situation will further worsen when sales of gasoline and diesel are banned in 2030 and when hybrids are banned in 2035. Many factors need to be taken into account by business users.

Is it possible to get a refund on the value-added tax I paid on a corporate car?

The government provides the same tax breaks for gas, diesel, and hybrid automobiles to owners of electric vehicles. If you purchase a new vehicle and use it only for business, you may be eligible to recoup the value-added tax you paid on it.

vat on the electric vehicle

Taxis, rental cars, and cars used by driving instructors are all examples of vehicles that can qualify for a VAT refund, but cars used for personal reasons, such as commuting to and from work, are not.

The cost of a corporate automobile is not eligible for a VAT refund. However, the VAT on leasing charges may be reclaimed in full, plus fifty percent, for privately available leased automobiles.

Is value-added tax (VAT) applicable to shared vehicles?

Pool cars can be used as company vehicles by one or more employees, which is a perk that many businesses can claim. That has to be:

Held in the headquarters and not assigned to any one employee

Commonly shared among many workers Rarely utilized exclusively by one worker

This car is only for business use.

vat on the electric vehicle

A business might get its money back for VAT payments if the automobile is considered a corporate car.

When I rent a car to go to and from work, can I get my money back from Value Added Tax?

The VAT on the cost of a replacement vehicle for a corporate vehicle that is out of commission is normally deductible at the rate of 50%.

If you rent a car for personal use (instead of using a corporate vehicle), you may get a refund on the VAT if the following conditions are met:

For no more than ten days, you may use it on rent.

You can’t utilize it for personal reasons since it’s only for business.

Can I be reimbursed for gas money?

If you use your car only for work, you may get back all the value-added tax you paid on gas. In other words, you can:

Pay the correct gasoline scale fee and collect any applicable VAT refunds.

In order to get back the value-added tax paid on gas used for business purposes alone, you must maintain particular records of how far you drove for each business trip.

Elect not to claim any VAT, for example, if your business travel is so rare that the gasoline scale price exceeds the VAT you are entitled to recover.

All repairs, off-street parking, and accessories installed specifically for business purposes are also deductible. This is possible despite the fact that VAT cannot be refunded on the car itself.

vat on the electric vehicle
Detail of the plug of an electric car being charged

Have you heard whether getting a refund on a used car’s VAT is possible?

You must see the VAT on the sales receipt for your used car. For example, if the seller uses the VAT margin system, you won’t be able to file a claim unless you include the invoice.

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