EMPLOYER-PROVIDED ELECTRIC CAR CHARGING POINTS AT HOME

Tax-efficient vehicles

With the governments stated aim for the UK to cease production of new petrol and diesel cars from 2030, it should come as no surprise that there are tax incentives for companies to provide zero-emission, i.e. wholly electric, cars to employees. The relevant percentage for calculating the employee's taxable benefit can be as low as 0% in the right circumstances. However, electric cars require an electronic charge point. So what are the tax implications of an employer making one available to employees?

Charge points

The tax position for electric car charging points provided by an employer can be quite tricky. It depends where the charging point is located and whether it’s given in conjunction with a company car or a car personally owned by an employee or director.

Personal ownership

Where a charging point is provided by an employer at or near the normal workplace, e.g. the firm’s premises, and it’s generally available for use by all employees and directors, there is no benefit in kind. This exemption applies where the electricity is used for business or private mileage. If an employer pays for a charging point which doesn’t meet the requirements of the exemption, e.g. it’s not available for use by employees generally, say because it’s located at the home of an employee or director, there is a taxable benefit which is calculated using the normal rules. These differ depending on whether the employer owns the car charging point or transfers ownership to the employee or director.

Where the exemption applies to an electric car charging point it also applies to the electricity paid for by the employer. But where the exemption doesn’t apply and the employer pays for the electricity, the employee is taxable on a benefit in kind equal to the cost of electricity used for private journeys. This can be avoided if the employee reimburses the employer no later than 5 July following the tax year end. HMRC's recommended rate is 4p per mile, though an employer can work out a rate based on actual costs if they prefer.

Employer ownership

The position for electric car charging points is simpler where the employee or director is provided with an electric or plug-in hybrid company car. An exemption, separate from that for workplace charging points, applies. It covers charging points wherever they are located, including at an employee’s or director’s home. The exemption extends to the cost of electricity paid for by the employer regardless of how it’s used. Therefore, the employee and others can use the electricity provided for business or private mileage without it resulting in a taxable benefit. It also applies to electricity used in the company car from a standard plug socket, or commercial charging points.

What about selling the home?

If the charging point is fixed to the employee’s home, as the owner of the home (where it’s not rented) they also become the owner of the charging point. A change of ownership, actual or effective, doesn’t result in a taxable benefit because the exemption prevents it, even if the employee sells their home.

HMRC has a useful tool for employers to check whether they, or their employees, need to pay tax or NI where electric charging is provided.