Electric Vehicle Charging For Company Vehicles

Published 31st October 2023

If you provide your employees with electric company cars or vans or reimburse them for the cost of charging their company vehicles at home, you may be interested in the recent change in HMRC’s guidance on the tax treatment of such payments and benefits.

According to the updated guidance, HMRC now accepts that reimbursing part of a domestic energy bill, which is used to charge a company car or van, will fall within the exemption. This means that no separate charge to tax under the benefits code will arise where an employer reimburses the employee for the cost of electricity to charge their company car or van at home. However, the exemption will only apply if it can be demonstrated that the electricity was used to charge the company car or van. Employers will need to make sure that any reimbursement made towards the cost of electricity relates solely to the charging of their company car or van and sufficient evidence is retained by the employer should an enquiry arise.

This is a welcome change in HMRC’s interpretation, as it aligns with the legislative provision and removes an unnecessary administrative burden for employers and employees. It also supports the government’s policy of encouraging the use of low emission vehicles and reducing carbon emissions.

If you have any questions about this change or need any assistance with your payroll and tax compliance, please do not hesitate to contact us. We are here to help you with all your accounting needs.

Check if you need to pay tax for charging an employee’s electric car
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