Home charging of company electric cars – new guidance

Insight /  27 September 2023

There are more than 52,000 company EVs on the roads in the UK, a number that increased significantly after benefit-in-kind (BIK) tax rates were cut for zero-emission vehicles in tax year 19/20.

Salary sacrifice schemes for company cars still remains an attractive benefit for many.

One of the concerns for some employers has been the tax treatment of home charging EVs where historically HMRC’s view has been that the reimbursement of home charging costs was a taxable benefit in kind.

However, new guidance published by HMRC shows a change of interpretation of the existing legislation. This sets out HMRC’s new position that reimbursement by an employer of the cost to an employee of charging at home a company electric car available for private use is not a taxable benefit.

The guidance now makes it clear that existing exemptions mean there is no separate charge to tax or NICs under the benefits code where an employer reimburses an employee for the cost of electricity to charge their company car at home, although employers will need to ensure that the reimbursement is solely for the company car.

This will be a welcome change which will give clarity and cut down on tax reporting.

About UNW

UNW’s award-winning employment taxes team has extensive experience of helping employers in:

  • Reviewing company car policy;
  • Supporting with implementation of salary schemes for company cars and other benefits;
  • Assisting with NIC efficiencies in private car schemes.

If you would like to discuss how we can help you, or have any other employment taxes related queries, please get in touch with us at employmenttaxesteam@unw.co.uk