HMRC has revised its guidance regarding the tax treatment of employers paying for the electricity used to charge company-owned cars and vans at employees’ residential properties. The latest update indicates that such payments are not considered additional taxable benefits.
Before this revision, HMRC categorised any reimbursement for electricity used in charging electric vehicles as a taxable benefit in kind. However, the updated guidance, as detailed in the EIM23900 manual, now includes the cost of electricity as indistinguishable from the other running costs of providing the vehicle and therefore inclusive within the taxable benefit of the company car itself.
It is essential to note that this treatment applies exclusively to the amount demonstrably used for charging the company vehicle. Therefore, employers are advised to reimburse only the specific amount attributable to this purpose and not encompass payments towards general energy costs.
For further advice, please contact your
local Moore adviser.