Charging a Company Electric Car: Home, Workplace and Public — and What Goes on the P11D

Electricity isn’t fuel.

It sounds like a technicality. It is, in fact, the single distinction that shapes how company electric cars are taxed — and it is why the charging rules are considerably more generous than most directors assume.

There is a second reason for the confusion. HMRC changed its own position on home charging. For several years its published guidance said that reimbursing an employee for charging a company car at home was a taxable benefit. It no longer says that. The revised view is now in the Employment Income Manual — but the old position is still repeated across a great many websites, and by a fair few advisers.

Here is where each type of charging actually lands.

First, the Car Itself

Before the electricity, the vehicle. A company car made available to a director or employee for private use is a benefit in kind. It is reported on a form P11D by 6 July following the end of the tax year, with the employer’s Class 1A National Insurance declared on a P11D(b) and paid by 22 July (19 July if you are not paying electronically).

The taxable amount is the car’s list price multiplied by an appropriate percentage set by its CO₂ emissions. This is where electric cars pull away from everything else. For 2026/27 the percentage for a fully electric car is 4%, rising by published steps to 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30. A petrol or diesel equivalent can sit several times higher.

In round numbers: a £40,000 electric car generates a taxable benefit of £1,600 for 2026/27. A higher-rate taxpayer pays £640 of income tax on that for the year, and the company pays Class 1A National Insurance at 15% — another £240. The equivalent figures on a petrol car of the same list price are usually an order of magnitude worse.

One forward-looking point worth diarising: payrolling of benefits in kind becomes mandatory on a phased basis from April 2027, at which point most benefits will be taxed through the payroll in real time rather than reported annually on a P11D. If you are still filing P11Ds by hand, that transition is worth planning for rather than absorbing at the last minute.

Charging at the Workplace

If the car is a company car, workplace charging is simply part of the running costs the employer provides, and no separate taxable benefit arises. There is nothing extra to report.

If the car is the employee’s own, a specific exemption has applied since 6 April 2018. No taxable benefit arises on electricity provided at workplace charging facilities, provided the conditions are met: the charging must be at or near the workplace, at premises under the employer’s control, through a dedicated charging point, and available to employees generally rather than restricted by grade or seniority.

That last condition is the one that trips employers up. A charge point reserved for directors is not covered by the exemption. One available to everyone at that site is.

Note also what the exemption does not stretch to: it covers charging at the workplace, not vouchers or reimbursement for the employee charging their own car somewhere else.

Charging at Home — the Rule That Changed

This is the important one, and the one most often got wrong.

Where an employer reimburses an employee for the cost of electricity used to charge a company car or van at home, HMRC now accepts that the payment falls within the exemption at section 239 ITEPA 2003 — the same provision that exempts things like repairs, insurance and road tax on a company vehicle. Its guidance at EIM23900 was revised to reflect this after a review of its earlier interpretation.

The practical effect: no separate benefit-in-kind charge, and no Class 1 or Class 1A National Insurance on the reimbursement.

There is one condition, and it does real work. The exemption applies only where it can be demonstrated that the electricity was used to charge the company vehicle. Reimbursing a share of a household energy bill on a rough estimate does not meet that test. What does, in practice, is data: a smart charge point that records consumption per session, a separately metered supply, or charge-point records tied to the vehicle. Reimbursement must relate to the company car and nothing else.

The same reasoning covers the installation of a home charge point where it is provided for a company car — that too sits within the section 239 exemption. Provide a charge point at an employee’s home for their own car and the treatment is different, so the distinction matters.

Public and Rapid Charging

Here is where “electricity isn’t fuel” does the heavy lifting.

The car fuel benefit charge — the substantial extra tax that arises when an employer pays for private fuel in a company car — applies to fuel. Electricity is not treated as fuel for that purpose. So an employer paying for public or rapid charging of a company electric car, including charging used for private mileage, does not trigger a fuel benefit charge.

That is a genuinely different outcome from the petrol equivalent. Give an employee a fuel card for a petrol company car and cover their private mileage, and the fuel benefit charge is often large enough to wipe out the value of the perk. Do the equivalent with a company EV and a charging card, and it does not arise.

Reimbursing Business Mileage: the Advisory Electricity Rate

A separate mechanism, and one commonly confused with the home-charging exemption above.

Where the employee pays for the electricity and you reimburse them per business mile driven in a company car, HMRC publishes advisory electricity rates. Pay at or below the advisory rate and there is no taxable profit to report. Pay above it, and the excess is earnings unless you can substantiate the higher actual cost.

Since 2025 there have been two rates, recognising that home charging is far cheaper than the public network. From 1 June 2026 the rates are 7p per mile for home charging and 15p per mile for public charging. HMRC reviews them quarterly, so check the current figure rather than relying on a rate you set last year.

The distinction to hold on to: the section 239 exemption covers reimbursing the actual cost of electricity used to charge the company car. The advisory rate is a per-mile figure for reimbursing business mileage. They are two different routes, and mixing them up is where policies tend to go wrong.

If It’s the Employee’s Own Car, None of This Applies

Worth stating plainly, because the assumption is common and expensive.

An employee using their own electric car for business travel is in the approved mileage allowance payment regime, not the company car regime. From 6 April 2026 the rates are 55p per mile for the first 10,000 business miles and 25p per mile thereafter — the first increase in over a decade, announced in May 2026 and backdated to the start of the tax year. The same rates apply whether the car is petrol, diesel, hybrid or fully electric.

Reimbursing the actual cost of home electricity for a privately owned car is not covered by the section 239 exemption, because that provision is about company vehicles. Such a payment is generally taxable earnings. The workplace charging exemption can still apply, but home charging reimbursement for a personal car is a different animal entirely.

VAT: the Messiest Part

Income tax and National Insurance are the settled bit. VAT recovery on EV charging is not, and it turns on a question that has nothing to do with the car: who is the supply of electricity actually made to?

• Charging at the employee’s home. The energy supplier’s contract is with the employee, not the business. There is no input tax for the business to recover, even where the car is a company car and the mileage is business. This is the point that surprises people most, because the income tax treatment is so favourable.
• Public charging. The supply can be made to the business, and VAT is charged at the standard rate. Recovery is available to the extent of business use, which means mileage records rather than assertions.
• Charging at the employer’s premises. Recoverable, with an apportionment where the vehicle is also used privately.
• Sole traders and partners. Treated differently from employees — the business proportion of home charging can be recovered.

HMRC has been reviewing aspects of this, and it is an area where the position for employees charging at home has attracted a good deal of professional criticism. Treat any VAT recovery on charging as something to confirm for your specific arrangement rather than assume.

What to Put in Place

None of this decides whether an electric car is right for your company. That is a question about cash, mileage, the vehicle and how long you intend to keep it. But the tax treatment is a real part of the arithmetic, and it is markedly better than the version of it still circulating online.

This post is intended as general guidance only and reflects HMRC guidance and rates as at August 2026. Advisory electricity rates are reviewed quarterly and benefit-in-kind percentages change annually. Always seek specific advice tailored to your own circumstances and refer to the latest HMRC guidance.