Can Employees Claim for Charging a Company Car at Home?
As electric vehicles (EVs) become increasingly prevalent, more companies are providing company cars to their employees. With the convenience of home charging, employees often wonder whether they can claim expenses for charging their company car at home. In this blog post, we will delve into the topic and explore the circumstances under which employees may be eligible to claim for charging a company car at home.
When it comes to claiming expenses for charging a company car at home, the tax implications vary depending on specific factors and regulations set forth by tax authorities. In the United Kingdom, Her Majesty’s Revenue and Customs (HMRC) provides guidelines on company car taxation. Here are some key considerations:
- Exclusive Use for Business Purposes: Generally, if a company car is used exclusively for business purposes and is not used for personal travel or commuting, employees may not be able to claim for home charging expenses. This is because the charging is considered part of the employee’s employment package and does not fall under allowable business expenses.
- Mixed-Use Vehicles: In cases where a company car is used for both business and personal purposes, such as commuting or personal trips during non-working hours, HMRC guidelines require employees to make a proportionate adjustment for private use. This means that only the business portion of the charging costs may be claimed as an expense.
- Employer Reimbursement: If an employer reimburses the employee for home charging expenses, it is important to consider the tax treatment of such reimbursement. Reimbursements may be subject to income tax and National Insurance contributions, unless they fall within specific exemptions outlined by HMRC.
- Advisory Fuel Rates (AFRs): HMRC publishes AFRs that employers can use to reimburse employees for business travel in company cars. These rates cover fuel costs, including electricity for EVs, and provide a simplified approach for employers to reimburse employees without requiring detailed expense claims. However, AFRs do not cover home charging.
To navigate the complexities of claiming for charging a company car at home, employees should consult HMRC guidelines and seek professional advice to determine their eligibility and obligations.
Additionally, it is essential for employers to establish clear policies regarding home charging expenses and communicate them effectively to their employees. These policies should align with HMRC guidelines and ensure compliance with tax regulations.
Alternative Options for Home Charging:
While claiming expenses for home charging may not always be feasible, employees can explore alternative options to mitigate their charging costs. Some possibilities include:
- Negotiating a Charging Allowance: Employees can discuss with their employer the possibility of negotiating a charging allowance as part of their employment package. This allowance could help offset the costs associated with home charging.
- Installing a Separate Meter: In some cases, it may be possible to install a separate electricity meter specifically for charging the company car. This allows for clearer separation between personal and business charging costs, making it easier to claim expenses for the business portion.
If you are a business that is considering investing in EVs for your company vehicles, or thinking about installing EV chargers, take a look at our dedicated webpage for EV Chargers for Business which provides information about the range of chargers we offer that could work for your business