Electric vehicle charging
Last checked 19 June 2026 · HMRC source
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.
Not the expense you’re looking for?
Search 74 UK business expenses.
Search another expense →Or read the guide: What can I claim as a business expense? →
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
How the tax relief on this actually works: capital items like this are usually claimed through capital allowances, not as an everyday running cost. Capital allowances explained →
Want someone to check this for you?
The Accountancy Partnership offer fixed-fee online accountancy for sole traders and limited companies — your own dedicated UK accountant, with unlimited help by email, phone or video call, and no long-term contract. They’ve been going over 15 years and work with over 15,000 UK businesses.
Readers here get 10% off their first year — sole trader plans start from around £22/month with the discount applied.
Get an instant quote →Worth saying: if your affairs are very simple, you may not need an accountant at all — this is for when you’d rather someone else handled it.
Affiliate disclosure: we may earn a commission if you sign up through this link. It doesn’t affect what you pay — the 10% discount applies either way. Our guidance is written independently.
Related allowances
Source: HMRC guidance