I have had a number of enquiries from people lately asking whether VAT on electric cars is recoverable as “Surely the government want to incentivise people to buy them!”. At the moment, the answer is no, recovery of VAT on electric cars is blocked, in the same way as VAT on any other car. The VAT Practitioners’ Group technical chair recently took part in some research conducted by HMRC into the VAT relating to electric vehicles. It seems to have been prompted following comments on the fact the Revenue & Customs Brief 7/2021 did not seem to allow recovery of VAT on charging costs by an employer unless the vehicle was charged at the employers premises. The research did go wider. Whilst it is not yet possible to comment on the specific questions, ideas suggested did include: · 100% recovery of VAT on purchase/lease of the vehicle if a company car to encourage “greener” cars. May need to have a private use adjustment; · Removal of the test for insurance that automatically assumes that sole proprietors will have private use because their cars are often on personal rather than business insurance; · Calculation of the costs of electricity to claim VAT if the employee charges the car at home; · No receipt required for charging in public places where the value is less than £25 Nothing specific ha been agreed yet, and the above are only ideas, but it seems this is an area where change may happen in the near future. | 
