Taxman mulls electric car conundrum

Though only 100 of the electric vehicles have so far been sold, the taxman is
wrestling with how to value the vehicle’s energy use for tax purposes.

Conventional vehicles allow taxpayers to claim back fuel costs against tax at
between 9p and 16p a mile. But since the cars are effectively ‘plugged’ in
before driving, it is unclear what costs can be claimed back.

Paul Jackson, director of Fleet software provider Miles consultancy, owns one
of the Smart cars, and told Accountancy Age that he was negotiating a reclaim
for fuel costs.

‘HMRC told me to send on my electricity bill, but I charge the car in
different places. They’ve not really thought about electric car rates, they just
don’t know how to calculate it,’ said Jackson.

Jackson hopes to get a discount to reflect the car’s environmentally friendly
status, in line with the government’s aim to encourage green practices through
the tax system. HMRC declined to comment.

Related reading