Starting in 2023, significant changes in the field of energy allowances are in effect, including the energy cap. In this blog, we cover the impact of the energy cap on charging costs and compensation.
What does the energy cap entail?
For households, a price cap on energy will apply as of 1 January 2023. Up to a consumption of 2,900 kWh, a maximum tariff of 0.40 cents per kWh has been set. This price cap gives households a discount on their energy bill. As a consumer, you are not required to apply for the energy cap. The government pays for the discount. The price cap applies to both variable and fixed contracts.
Energy consumption above the energy cap
The average kWh consumption in the Netherlands is around 2,500 kWh (Average energy consumption in the Netherlands | Environment Central). The electricity consumption of an all-electric or plug-in hybrid car is significant, so a lease driver will in almost all cases exceed the cap. If a lease car driver consumes more energy than the price cap, they pay the rate from the energy contract for the usage above the cap.
Calculation example: The average consumption of an electric car is between 8 kWh and 30 kWh per 100 kilometres. Suppose you drive 10,000 kilometres a year, a car that consumes 20 kWh per 100 kilometres will consume 2,000 kWh a year. This puts the lease car driver's energy consumption at 2,500 (average household use) + 2,000 (electric lease car use) = 4,500 kWh per year, which is 1,600 kWh higher than the energy cap.
Tariff allowence charged kWh
As an employer, you can compensate employees for their electricity consumption in a lease car at a cost price. In other words, you can compensate the energy costs of the company car based on the rate as included in the employee's energy contract. There is a good chance that the employee who charges at home exceeds the cap, in which case the employee can apply the non-discounted rate per kWh for the home charging allowance. It is advised to discuss this with your tax advisor beforehand.
VAT on energy
In addition, the VAT rate on electricity also increased from 9% to 21% from 1 January. This will also have an impact on the compensation for charging transactions at an employees' home. The rate per kWh will increase due to the 12% increase. If the lease car driver now applies 50 cents including VAT, this amount will be 55.5 cents per kWh from 1 January. We advise lease car drivers to adjust their kWh rate, which applies before January, in the portals of our suppliers in good time so that they are compensated the correct rate.
Tip: coordinate with your lease car drivers that, as an employer, you can apply retrospective corrections to charge cost allowances, should the actual energy costs and the amounts entered in the charging suppliers' portals not match.