HMRC corrects guidance on company-owned EV car charging

Published: 3rd October 2023

The tax and NI rules surrounding wholly electric vehicles (EVs) are more generous than for other company cars. This treatment extends to reimbursement of costs incurred by an employee in charging the EV. However, until recently HMRC’s guidance stated that where an company-owned EV was available for private use, any reimbursement is taxable as earnings. But this is inconsistent with a specific exemption in the legislation. There is also currently no specific fuel benefit for EVs, as HMRC does not consider electricity a fuel.

HMRC’s guidance at EIM23900 has now been updated to make clear that “The exemption under s.239(2) ITEPA 2003 means there is no separate charge to tax under the benefits code where an employer reimburses an employee for the cost of electricity to charge their company car at home.” The NI position is the same. However, HMRC does state that employers must ensure that the reimbursement made towards the cost of the electricity is solely for the company car.