Charging your company EV at home? You could be leaving money on the table.
This guide explains exactly how to reclaim electricity costs from your employer, understand your Benefit-in-Kind (BIK) tax position, and maximise the financial benefits of your electric company car in the UK.
Key fact: Electric company cars have just 2-5% BIK rates (2024-2028), saving you £3,000-£5,000 per year compared to equivalent petrol company cars.
Understanding Company Car EV Tax Benefits (2024-2028)
Benefit-in-Kind (BIK) Rates for Electric Vehicles
The UK government has locked in ultra-low BIK rates for electric vehicles through 2028:
| Tax Year | Zero-Emission EV | Hybrid (1-50g CO2) | Petrol (160g CO2) |
|---|---|---|---|
| 2024-25 | 2% | 5-14% | 37% |
| 2025-26 | 3% | 5-14% | 37% |
| 2026-27 | 4% | 5-15% | 37% |
| 2027-28 | 5% | 5-16% | 37% |
Real-World BIK Savings Example
Tesla Model 3 Long Range (P11D value: £50,000)
| Tax Year | BIK Rate | Taxable Benefit | 40% Taxpayer Pays |
|---|---|---|---|
| 2024-25 | 2% | £1,000 | £400/year |
| 2025-26 | 3% | £1,500 | £600/year |
Equivalent BMW 3 Series Petrol (P11D value: £45,000)
| Tax Year | BIK Rate | Taxable Benefit | 40% Taxpayer Pays |
|---|---|---|---|
| 2024-25 | 37% | £16,650 | £6,660/year |
Annual Saving (EV vs Petrol): £6,260 in tax alone
Reimbursing Home Charging Costs
HMRC Advisory Electricity Rate (AER)
HMRC allows employers to reimburse business mileage in company EVs at an Advisory Electricity Rate:
| Period | AER Rate |
|---|---|
| From December 2024 | 9p per mile |
| Previous (Sept-Nov 2024) | 8p per mile |
| (Updates quarterly) | Check gov.uk |
How the AER Works
If you charge at home for business miles:
- Track your business mileage (not commuting—that's private)
- Multiply by 9p/mile
- Claim from employer as tax-free reimbursement
Example:
- Business miles in month: 500
- AER rate: 9p/mile
- Claim: 500 × £0.09 = £45 tax-free
Important: The AER is for business miles only. Commuting between home and regular workplace is not business mileage.
Claiming Actual Electricity Costs (Alternative Method)
If your actual electricity costs are higher than the AER reimbursement, you can instead:
- Install a smart meter or sub-meter on your EV charger
- Track exact kWh used for business charging
- Calculate cost at your actual tariff rate
- Claim this from employer
When This Makes Sense:
- High electricity rates (over 30p/kWh)
- Inefficient EV (over 4 miles/kWh)
- High business mileage
Example:
- 500 business miles at 3.5 miles/kWh = 143 kWh
- At 28p/kWh = £40.04 actual cost
- AER would give: 500 × 9p = £45
- In this case, AER is better
💡 Pro Tip: Calculate both methods and use whichever gives you the higher reimbursement. The AER is usually better unless your electricity is expensive.
Employer-Provided Home Chargers
Tax Treatment of Home Chargers
If your employer provides a home charger:
The provision of a home charging point for a company car is not a taxable benefit provided:
- The charger is provided in connection with a company car
- The car is capable of being charged from the charger
- The charger is at or near the employee's home
What's Covered (Tax-Free):
- Cost of charger unit
- Installation costs
- Electrical work required
- Annual maintenance
HMRC Reference: ITEPA 2003 s 239 (zero-emission car charging exemption)
When You Leave the Company
Charger ownership varies by employer policy:
- Charger stays with you - No tax implication if provided while you had the company car
- Charger removed - Employer pays removal costs (no tax)
- You buy the charger - Transfer at market value (typically £200-£500)
Check your company car policy for specific terms.
Electricity Billing to Employers
Setting Up Proper Billing
Method 1: Dedicated EV Tariff (Recommended)
Some energy suppliers offer "fleet" or "company car" tariffs:
- Separate meter/supply for EV charging
- Bills go directly to employer
- Clear separation of personal vs business use
- Best for high-mileage company car drivers
Method 2: Smart Charger Tracking
Most smart chargers can track energy use:
- Ohme/Wallbox/Zappi - Export charging reports showing kWh
- Use reports to invoice employer monthly
- Apply your actual electricity rate
- Employer reimburses via payroll (not taxable if business-related)
Method 3: Sub-Meter Installation
- Install dedicated electricity meter for EV
- Clear, auditable record of consumption
- Employer pays separately
- Cost: £100-£300 for sub-meter installation
Creating a Billing Agreement
Agree the following with your employer:
- Billing frequency - Monthly is typical
- Rate - Your actual tariff rate (evidence required)
- Documentation - Charger reports, meter readings
- Payment method - Expense claim or direct payment
- Business vs private split - If applicable
Workplace Charging Scheme for Employers
WCS Grant Details
Employers can claim the Workplace Charging Scheme grant:
- Grant amount: Up to 75% of costs (max £350 per socket)
- Maximum sockets: 40 per applicant
- Eligible: UK registered businesses
- Requirement: Chargers for employee/fleet use
Salary Sacrifice EV Schemes
Many employers now offer salary sacrifice EV schemes:
How It Works:
- You "sacrifice" part of your gross salary
- Employer leases an EV on your behalf
- You pay BIK tax on the car
- Net result: significant tax/NI savings
Example Calculation:
| Item | Without Sacrifice | With Sacrifice |
|---|---|---|
| Gross Salary | £50,000 | £50,000 |
| Salary Sacrifice | £0 | -£6,000/year |
| Taxable Salary | £50,000 | £44,000 |
| BIK (2% of £40k car) | N/A | +£800 |
| Income Tax (40%) | £11,500 | £9,920 |
| NI (12%) | £3,300 | £2,580 |
| Net Cost of Car | £0 | £4,680 |
| Equivalent Market Lease | N/A | ~£8,000/year |
| Annual Saving | - | £3,320 |
Warning: Salary sacrifice reduces your pension contributions if percentage-based. Discuss with your HR/payroll team.
Record Keeping Requirements
What to Track for HMRC
Keep records of:
- Mileage log - Date, start/end location, purpose, miles
- Charging records - Date, kWh, location (home/public/workplace)
- Expense claims - Amounts claimed from employer
- Electricity bills - Proof of your tariff rate
Mileage Tracking Apps
Recommended UK apps:
- MileIQ - Automatic tracking, HMRC-compliant reports
- Driversnote - GPS tracking, expense integration
- Mileage Tracker (HMRC) - Free, basic functionality
- Xero/QuickBooks - If self-employed, integrated tracking
HMRC Audit Requirements
In case of HMRC enquiry, you need:
- Contemporaneous mileage records (kept at the time, not reconstructed)
- Evidence of business purpose for each trip
- Charging cost evidence (bills, charger reports)
- Employer reimbursement records
⚠️ Important: Generic estimates like "about 500 business miles per month" are not acceptable. HMRC expects specific records.
Private Use of Company EV
What Counts as Private Use?
Private use (covered by BIK):
- Commuting to regular workplace
- Personal trips (shopping, leisure, holidays)
- Family use of company car
- Any non-business journey
Business use (can be reimbursed):
- Traveling to clients/customers
- Traveling between different work sites
- Traveling to temporary workplaces (under 24 months)
- Business errands
Home Charging for Private Miles
When you charge at home for private miles:
- You pay for the electricity (it's part of your personal costs)
- BIK covers the benefit of having a company car
- No additional tax on home electricity used for private miles
However, if your employer pays for ALL your home electricity (not just business miles):
- The private use element is taxable
- Report via P11D
- Rarely happens in practice
Company EV Charging at Public Chargers
Using Company Fuel Cards
Many fleet fuel cards now work at EV charging networks:
| Card | Networks | Notes |
|---|---|---|
| Allstar | Shell, BP, GridServe | Wide coverage |
| Shell Card | Shell Recharge | Growing network |
| BP Plus | BP Pulse | Extensive rapid network |
| Octopus Electroverse | Multiple | Aggregator card |
Personal Cards for Business Charging
If you use personal payment for business charging:
- Keep receipts (app screenshots are fine)
- Claim via expenses
- Full cost reimbursed (no tax implication)
- Include as business expense claim, not mileage
Transitioning from ICE to EV Company Car
Tax Position on Changeover
If you're switching from petrol/diesel to EV company car:
Month of change: BIK calculated pro-rata
- Part-year at old (petrol) rate
- Part-year at new (EV) rate
- Tax code adjusted automatically (usually)
Home Charger Installation
When transitioning to EV company car:
- Discuss charger provision with employer early
- Installation timeline - Book 4-6 weeks ahead
- Existing petrol infrastructure - No longer needed
- Fuel card transition - Ensure EV networks added
Frequently Asked Questions
Can I charge my company EV at home for free (employer pays)?
Yes, if your employer agrees. The employer can reimburse you for business mileage electricity (tax-free at AER rate) or pay for all home charging (private use becomes taxable benefit). Most employers reimburse business mileage only to avoid P11D complications.
What if my employer doesn't offer EV reimbursement?
You have options:
- Request they implement the AER reimbursement (it's simple for payroll)
- Claim any business mileage electricity as a tax-deductible expense on your self-assessment (complex, requires records)
- Negotiate a higher salary to cover the cost
Is there Benefit-in-Kind tax on employer-paid charging?
Charging at workplace chargers: No BIK (covered by exemption) Charging at home for business miles: No BIK (reimbursement of expense) Charging at home for private miles paid by employer: Yes, BIK applies
Can I claim 45p per mile for an electric company car?
No. The 45p/25p Approved Mileage Allowance Payment (AMAP) rates are for own car used for business, not company cars. Company car drivers use the Advisory Electricity Rate (currently 9p/mile for EVs).
What happens to my home charger if I leave the company?
Depends on your employer's policy. Common outcomes:
- You keep the charger (most common with older installations)
- Employer removes it at their cost
- You buy it at market value Get this in writing when the charger is installed.
Do I need to track private vs business charging?
Not necessarily. If your employer only reimburses business mileage (via AER), you just need business mileage records. The electricity split handles itself—you claim business miles, everything else is private (covered by your BIK).
Company Car EV Checklist for Employees
Before Getting the Car:
- Confirm BIK rate with employer/fleet manager
- Discuss home charger provision
- Agree reimbursement method (AER or actual cost)
- Set up mileage tracking system
When Car Arrives:
- Schedule home charger installation
- Download charger app and set up account
- Start mileage log from day one
- Get fleet fuel card updated for EV networks
Monthly:
- Export charging data from smart charger
- Submit mileage/expense claim to employer
- Check payslip for correct BIK deductions
Annually:
- Review tax code (HMRC should adjust automatically)
- Check P11D matches your records
- Consider if salary sacrifice would save money
