Tax rules for electric car charging costs

In this article we're going to discuss the current tax rules for electric car charging costs. This seems appropriate given the controversy surrounding electric cars at the moment. For example cold weather's negative impact on their range and the lack of available (and functioning!) charging points across the UK.

How the tax rules for electric car charging costs are applied will very much depend on whether the vehicle is recharged at home or the place of work. It will also depend on whether the vehicle is owned by the company or personally. HMRC have discussed the various scenarios in their guidance and we cover these below.

Electricity costs - charging point at workplace

Where the company permits an electric car to be recharged at the workplace the position is as follows:

If you use a company car then there is no taxable benefit as electricity does not fall within the definition of fuel.
Where this is your own personal car, similarly there will be no taxable benefit.

Electricity costs - charging point at employee's home

Where the electric car charging point is based at your home, the tax treatment is slightly more complex. This depends on whether you or the company own the car concerned plus it will also be contingent on whether the company provides the electricity or you have met these costs personally.

Car charged at home - company provides electricity costs

If this is a company car, and the electricity is provided by your employer, there will be no taxable benefit in kind on the costs of charging the vehicle.
Where this is your privately owned vehicle, then even if there is exclusive business use you will be taxed on the total cost of electricity used. Equally where there is mixed use, the electricity costs will be taxable as a benefit-in-kind. Unfortunately, there is no matching deduction that can be made for business mileage using mileage rates.

Car charged at home - employee pays electricity costs

If this a company car with business use only then you will not be taxed on any reimbursement made by your employer for your electricity costs.
Where this is a company car used both for business and private purposes then any reimbursement of electricity costs made by your employer will be taxed as earnings. It may be possible to claim a deduction for business miles travelled.
When you own the vehicle personally, then any reimbursement made by your employer for private use is taxable. However if the car is used exclusively for business or there is a mixture of business and private use it may be possible to claim a deduction for the cost of electricity relating to business miles travelled.

Car charged at home - no reimbursement of electricity costs

There are no tax implications for a company car with private use only.
Where this is a company car used both for business and private purposes then it may be possible to claim a deduction for business miles travelled.
As in the case of the company car above, there are no tax implications for a personally owned car with no business use.
If your personal car is used both for business and private purposes, then it may be possible to claim a deduction for business mileage.

Conducting your business from home

Arguably where you almost exclusively carry out your business from home and have installed an electric car charging point at your home, the workplace charging rules should apply (see above). However care should be taken, especially if you own your electric car personally and your company has applied for a government grant towards the cost of installing the electric car charging point at home. This may compromise any tax deduction for any charging costs relating to business use. Therefore where you have been awarded a government grant for an electric car charging point which has been installed at your home, prima facie this should be covered by the workplace charging rules.

What about vans?

There is no taxable benefit in kind where your company provides you with an electric van, even if it is used privately. Additionally there is no taxable benefit on electricity costs provided. Maybe now is the time to start investing in a Cybertruck!

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Tax rules for electric car charging costs

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