HMRC corrects guidance on company-owned EV car charging
Occasionally, HMRC publishes guidance that is at odds with what the legislation says. A recent example of this is in respect of reimbursement for the costs of charging company-owned electric vehicles. What’s the full story?
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.
Related Topics
-
Save tax with pedal power
With summer on the way some of your workers have asked whether you would consider starting a cycle-to-work scheme. Is there a simple way to set one up?
-
What do the main parties intend to do with tax?
With three weeks to go until the election, the main parties have been making tax-related promises. What do we know so far?
-
Disincorporation - is it worth it?
Your business has suffered a dip in the last couple of years and you’re looking to downsize. As part of the process you want to close your company and operate as a sole trader instead. What are the tax consequences?