Charging company electric vehicles – What you need to know about costs, reimbursements, and tax

As electric vehicles (EVs) become more common, more company car drivers are charging their vehicles at home. What does that mean for costs, reimbursements, and tax?  

Charging a company EV at home – Who pays? 

If you have a company-provided EV and charge it at home, you will need to figure out how much of your electricity bill relates to business use. There are a few ways to do this: 

• Smart chargers or separate meters – Some EV chargers and smart meters track exactly how much electricity goes into your car, making it easy to calculate costs. 

• Tariff-based estimation – If you do not have a separate meter, you can estimate the cost by tracking how much electricity your car uses and multiplying it by your tariff at the time of charging. 

• HMRC’s Advisory Electricity Rate (AER) – HM Revenue & Customs (HMRC) sets an official rate for reimbursing business mileage. Right now, it is 7p per mile. 

Can your employer reimburse home charging costs? 

Yes, but there are rules. Your employer can reimburse you for the electricity used to charge your company car at home if: 

• The reimbursement is based on the actual cost of electricity used for business miles, or 

• They use the HMRC AER (7p per mile) to cover business mileage. 

You can claim a tax deduction if your employer does not reimburse your home charging costs. However, this must be based on your actual electricity costs, not the AER. 

Employers need to ensure their calculations are accurate to avoid tax issues. 

Is there a taxable benefit for home charging? 

If your employer reimburses you for the cost of electricity used only for business miles, there is no taxable benefit. 

However, if they cover private mileage too, HMRC will treat that as taxable earnings. 

What about mileage allowances for EVs? 

If you use your own EV for work, your employer can reimburse you using Authorised Mileage Allowance Payments (AMAPs). 

If they pay you less than the official AMAP rate, you can claim Mileage Allowance Relief (MAR) to make up the difference. 

For company cars, the employer can use HMRC’s AER (7p per mile) to reimburse electricity costs. If they don’t, you can claim a tax deduction, again, based on the actual cost per mile, not the AER. 

Can employees charge company cars at work? 

Yes. If your employer provides charging facilities at or near the workplace, there’s no taxable benefit, as long as: 

• The charging facilities are available to all employees (not just specific ones). 

• The exemption covers the cost of electricity, the charging point itself, and any related services. 

If charging is restricted to a select group, HMRC may consider it a taxable benefit. 

What about public charging? 

• If your employer directly pays for public charging, there’s no taxable benefit. 

• If they reimburse you for public charging, it could be taxable, unless the charging was exclusively for business use. 

Navigating EV tax rules can be tricky, but we are here to help. Get in touch with our team of expert accountants to ensure you are claiming (or reimbursing) costs correctly.