Electric vehicles home charging expenses — compliance guideline

The ATO has released a draft compliance guideline to address the compliance challenges faced by taxpayers in relation to separately identifying home charging costs for electric vehicles (EVs) from the total electricity consumption of a household.

It sets out a proposed method that calculates the cost of electricity when an EV is charged at an employee’s or an individual’s home. Taxpayers may choose to apply a rate of 4.20 cents per kilometre travelled in an FBT or income year.

Fringe benefits tax 

If an employer provides an employee or associate with an EV that lead to the provision of car, residual or expense payment benefits, as per this draft guideline, will have the option to use the shortcut method ie a rate of 4.20 cents per kilometre travelled to calculate taxable value of such benefits

Income tax deductions

The shortcut method can also be used by an individual taxpayer to calculate work-related car expenses for income tax purposes when using the logbook method, for a motor vehicle which is not a car, a deduction may also be claimed by calculating the total kilometres travelled by the vehicle during an income year.

Eligibility for making a claim

To be eligible to apply this method, yearly odometer readings, logbooks and at least one electricity bill must be maintained/obtained.

An estimate of kilometres travelled in the 2022–23 FBT year and income year may be used if odometer records were not kept at 1 April or 1 July 2022. This transitional rule will not be available in subsequent years. 

Adopting this methodology is optional, and a taxpayer may choose to opt-out/opt-in on a yearly basis.