Workplace EV Charging: Understanding the Tax Implications of a Taxable Benefit

With the increasing popularity of electric vehicles (EVs), many workplaces are adopting electric vehicle charging infrastructure to support their employees’ sustainable commuting choices. However, one question that often arises is whether workplace EV charging is considered a taxable benefit. In this blog post, we will explore the tax implications of workplace EV charging and shed light on whether it is subject to taxation.

A taxable benefit refers to any non-cash perk or benefit provided to an employee by their employer, in addition to their salary. These benefits are subject to income tax and National Insurance contributions. The taxation of specific benefits depends on various factors, including the nature of the benefit, its value, and any exemptions or allowances set forth by tax authorities.

The treatment of workplace EV charging as a taxable benefit can vary depending on the circumstances and the policies of tax authorities such as Her Majesty’s Revenue and Customs (HMRC) in the United Kingdom. Here are some key considerations:

 

1. Charging Infrastructure Ownership: If the workplace EV charging infrastructure is owned and provided by the employer, the value of this benefit may be subject to taxation. HMRC considers it a taxable benefit because it is a non-cash perk provided by the employer.
2. Private Use Considerations: The tax treatment of workplace EV charging may also depend on the extent of private use allowed. If charging is solely available for business purposes during working hours and there is no personal use of the charging infrastructure, it may be less likely to be considered a taxable benefit. However, if personal use is permitted, it could be subject to taxation.
3. Charging Costs: The tax treatment can also be influenced by who covers the costs of the electricity used for workplace charging. If the employer pays for the charging costs, it may be regarded as an additional taxable benefit. Conversely, if the employee covers the charging costs, it is less likely to be subject to taxation.
4. Exemptions and Allowances: It’s important to note that tax authorities may provide certain exemptions or allowances that affect the taxation of workplace EV charging. For example, HMRC offers an exemption for electricity used in workplace charging where it is made available to employees for business use only and does not result in a taxable benefit.

To determine whether workplace EV charging is a taxable benefit, it is recommended that both employees and employers consult HMRC guidelines or seek professional advice. HMRC provides detailed guidance on various benefits, including workplace charging, to help individuals understand their tax obligations accurately.

If you are a workplace that is 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