Electric vehicle charging

Business EV charging costs are allowable, but the rules vary significantly depending on where charging takes place and who owns the vehicle. Workplace charging provided by an employer is exempt from benefit-in-kind tax under a specific statutory exemption. Home charging is not exempt. Company electric cars carry a low — but rising — benefit-in-kind rate. Advisory electric rates for mileage reimbursement split between home and public charging from June 2026.

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Conditions

Sole traders using the actual running-costs method can deduct the business proportion of EV charging costs as a vehicle running expense — whether charged at home or at a public charger. The deductible amount is the total charging cost multiplied by the business-use fraction (business miles divided by total miles). Sole traders using the simplified mileage rate (55p/mile for the first 10,000 business miles in 2026/27, then 25p/mile) cannot claim charging costs separately, as the rate is all-inclusive. For electric vehicles under the mileage method, the AER element is subsumed within the AMAP rate.
For a limited company or employer providing workplace charging facilities to employees, a statutory benefit-in-kind exemption applies under section 237A ITEPA 2003. No taxable benefit arises where: (a) the charging facilities are at or near the employee's workplace; (b) the facilities are made available to all the employer's employees generally (not selectively); and (c) the arrangement is not part of an optional remuneration (salary-sacrifice) scheme. Where all three conditions are met, neither income tax nor NIC applies to the electricity provided.
The workplace charging exemption does not cover home charging. Where an employer reimburses an employee for home charging electricity (not at the employer's premises), the reimbursement is a taxable benefit unless it falls within the advisory electric rate framework. From 1 June 2026, HMRC's advisory electric rate (AER) for company electric cars is 7p per mile for home charging and 15p per mile for public charging. Employers who reimburse business miles at or below the relevant AER create no taxable benefit; reimbursements above the AER create a benefit on the excess. Where charging is split between home and public locations, the mileage can be apportioned accordingly.
A limited company can also claim 100% first-year allowances on the capital cost of installing electric vehicle charging points for business use. This applies to the hardware and installation costs. The Workplace Charging Scheme (WCS) grant offers up to £500 per socket (from 1 April 2026) for eligible installations, covering up to 75% of purchase and installation costs, capped at 40 sockets per applicant. The WCS has been extended for a final year to 31 March 2027.
Electric company cars carry a benefit-in-kind rate that rises annually. For the 2026/27 tax year the appropriate percentage for a fully electric (zero-emission) company car is 4% of the car's P11D list price. This rises to 5% in 2027/28. These rates are legislated in Finance Act 2023 (for years up to 2027/28) and Finance Act 2025 (for subsequent years). Although rising, the BIK rate for electric cars remains substantially lower than for petrol or diesel equivalents, making electric company cars significantly more tax-efficient for both the employer and the employee.
From 1 June 2026 HMRC updated its advisory electric rates: 7p per mile where the company car is charged at the employee's home, and 15p per mile where it is charged at a public charger. Where a journey involves both home and public charging, the mileage can be apportioned. These rates are reviewed quarterly alongside petrol and diesel rates — always check the current GOV.UK advisory fuel rates page before reimbursing.

Common mistakes

Assuming the workplace charging exemption covers home charging — it does not. The exemption is specifically for facilities provided at or near the employer's premises.
Reimbursing employees for home EV charging at a flat rate above the advisory electric rate without accounting for the taxable benefit on the excess.
Claiming EV charging costs separately when using the mileage rate — the rate covers all running costs including charging, and a double claim is not permitted.
Treating all EV charging the same regardless of location when applying advisory rates — HMRC now uses different rates (7p/mile home, 15p/mile public), so the location of charging affects the reimbursement calculation.

What to keep

EV charge records or app statements showing dates, locations (workplace, home or public) and kWh/cost per session.
For home charging reimbursements: a record of business miles driven, the proportion charged at home versus public chargers, and the advisory rate applied.
For capital allowances on chargepoint installation: installation invoice and WCS grant correspondence if applicable.

Real-world example

A limited company installs two EV charging sockets at its office for employees to use. The installation costs £3,500; the company claims a 100% first-year allowance on this and applies for a WCS grant of £1,000 (2 sockets × £500). Employees who charge their company EVs at work pay no benefit-in-kind on the electricity. A director who also charges her company EV at home is reimbursed by the company at 7p/mile for her home-charged business miles — within the advisory rate, so no tax or NIC arises.

Frequently asked

Is there any tax or NIC if my employer pays for me to charge my electric company car at work?

No — provided the charging facilities are at or near the workplace, are available to all employees generally, and are not part of a salary-sacrifice arrangement. The statutory exemption under section 237A ITEPA 2003 means no benefit-in-kind arises and no NIC is due.

What is the benefit-in-kind rate for a fully electric company car in 2026/27?

The appropriate percentage for a zero-emission electric car is 4% of its P11D list price for 2026/27, rising to 5% in 2027/28. This is significantly lower than petrol or diesel cars, which typically attract rates of 20–37% depending on CO2 emissions.

My employer reimburses me for charging my company EV at home — is that taxable?

It depends on the rate. HMRC's advisory electric rate for home charging is 7p per mile (from 1 June 2026). If your employer reimburses you at or below 7p/mile for home-charged business miles, no taxable benefit arises. Reimbursements above that rate create a benefit on the excess. The rate is reviewed quarterly, so check the current GOV.UK advisory fuel rates page for the figure in force.

Not sure how this applies to you?

The rules shift with your circumstances. A qualified accountant can confirm what you can claim and handle it for you.

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Related allowances

Source: HMRC guidance · Last checked 19 June 2026

This page is general information based on HMRC published guidance, not tax advice. Status shown is a plain-English summary — your own position can differ. Always check the HMRC source above and speak to a qualified accountant before making a claim.