Charging an electric company car: what you need to know

With the important focus on achieving Net Zero goals and targeting personal emissions, more and more company cars seem to be following the electric car trend.

This also comes with the added benefit of avoiding the extra costs associated with volatile fuel prices.

Whilst having an electric company car can be a great perk for employees, both employers and employees need to be aware of the tax implications associated with this.

Is tax due on charge points?

As with paying for fuel for a petrol/diesel car, it is common for employers to cover the cost of charging electric cars, or to provide charging points.  The way in which this is structured will impact on whether tax is due.

No taxable benefit arises where the employer allows cars to be recharged from a vehicle charging point at or near the company premises.  This is also extended to the charging of an employee’s own electric vehicle providing that charging is available to all employees.

There may also be the possibility for employers to save money on the initial installation of workplace charging points through the Workplace Charging Scheme.

Where the employer pays for a vehicle charging point to be installed at the employee’s home no taxable benefit arises where the employee has a company car.  However, a benefit in kind will arise where an employee uses this to charge their own electric vehicle, although the employee can claim relief for business miles travelled.

Where the employer reimburses the employee for the electricity used for charging their company vehicle at home the reimbursement is tax free and no taxable benefit will arise.

Finally, should the employer provide a charge card to the employee, enabling them to use a charging point for their company car, no taxable benefit arises. However, if the charge card is used by the employee to charge their own private vehicle the employee would be subject to a taxable benefit based on the cost to the employer.  Again, relief may be claimed for the business miles travelled.

Employees may be eligible to apply for the EV chargepoint grant  which is a grant contributing up to 75 per cent of the installation of a charge point.

You can also check the cost of charging at home using this free Electric Charging Calculator from GoCompare.

For advice and support please contact Rachel Warriner, Head of Corporate Tax, at RMT Accountants & Business Advisors on 0191 256 9500 or via the contact us form.