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Electric charging of company vehicles at home base

19 October 2023

HMRC's updated guidance allows tax-free reimbursement for charging company cars at home, with proof of use required. Stay updated to ensure compliance with the new rules.

HMRC has published revised guidance concerning the charging of company cars and vans at residential properties. HMRC had previously maintained that the reimbursement of costs in relation to powering a company car or van at a residential property was a taxable benefit. This advice seemed at odds with the exemption on payments and benefits provided in connection with company cars and vans laid out in the relevant legislation.

HMRC has confirmed, following reviews, that electric charging of company vehicles at home can be treated as a tax-free benefit.

HMRC has published revised guidance about this change in interpretation and has stated that:

Following a review of our position, HMRC now accepts reimbursing part of a domestic energy bill, which is used to charge a company car or van, will fall within the exemption provided by section 239 ITEPA 2003.

This means that no separate charge to tax under the benefits code will arise where an employer reimburses the employee for the cost of electricity to charge their company car or van at home. 

HMRC said that the exemption will only apply where it’s demonstrated that electricity was used to charge the company vehicle.  Employers will need to ensure any reimbursement towards electricity costs relates solely to the charging of their company vehicle.

Source: HM Revenue & Customs Tue, 17 Oct 2023 00:00:00 +0100

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