Company car home charging in the UK: what your employer can reimburse tax-free

There are two completely different ways an employer can put money back in your pocket for charging a company car, and they get mixed up constantly — including in a fair amount of published advice. One pays you per mile. The other pays you for the electricity. They have different limits, different paperwork, and one of them covers your private mileage while the other never does.

This article separates them, sets out what HMRC actually says about the second one, and flags a widely quoted sentence that is routinely attributed to the wrong organisation.

Why electricity is treated differently

A company car available for private use is taxed through the car benefit charge. Where an employer also pays for petrol or diesel used privately, a second charge normally applies — the car fuel benefit charge. For electric cars it does not, and the reason is a definition rather than a concession: s.149(4) ITEPA 2003 excludes any facility or means for supplying electrical energy from the meaning of “fuel”.

Because there is no fuel benefit charge to trigger, the carve-out that would otherwise block the general exemption falls away, and reimbursing the cost of charging lands squarely within s.239(2) ITEPA 2003 — the exemption for payments in connection with a taxable car. National Insurance follows the same path: the payments are disregarded in the earnings calculation, so neither Class 1 nor Class 1A applies.

The one condition HMRC attaches

The exemption is not unconditional. HMRC’s guidance puts the obligation on the employer, in one sentence that is worth reading closely:

“Employers will need to ensure that the reimbursement made towards the cost of the electricity is solely for the company car.”HMRC, Employment Income Manual EIM23900

Note what that sentence does not say. It does not require a meter. It does not name a device, a standard, or an accuracy class. It states an outcome and leaves the method entirely open.

That distinction matters more than it might seem, because the equivalent German and Austrian rules do impose a measuring requirement, and UK guidance is often described as though it did the same. It does not. What the UK asks for is evidence, not measurement — and anyone telling you that HMRC mandates a particular meter is overstating the position.

One more thing, in the interest of not being caught out: HMRC’s own online checker for charging an employee’s electric car does not mention the evidence condition at all. Answer that the car is employer-provided and that the employee pays and is reimbursed, and it returns no tax, no National Insurance and nothing to report. If someone in your organisation clicks through it and comes back saying the paperwork is unnecessary, that is why. The manual is the fuller statement of HMRC’s position; the checker is a summary.

The other route: 7p a mile

The Advisory Electricity Rate is the route most people have heard of. From 1 June 2026 it stands at 7p per mile for electricity taken at home and 15p per mile for public charging, reviewed quarterly. Employers may pay more if they can show the actual cost per mile is higher; pay more without that evidence and the excess is taxable earnings.

The important limitation is one of scope: advisory rates apply to business travel. They reimburse the miles you drive for work, and they need a mileage log rather than kilowatt-hours.

If your employer covers the full running cost of the car — the normal arrangement for a company car — the second column is the one that actually reflects what you spend. If they only reimburse business travel and leave private running costs with you, the advisory rate is simpler and there is nothing to gain from the extra paperwork.

Salary sacrifice, and why this keeps coming up

A car taken through salary sacrifice is, for tax purposes, an ordinary company car — so everything above applies unchanged. The optional remuneration rules that normally strip the advantage out of salary sacrifice do not apply to cars at or below 75 g/km CO₂, which leaves fully electric cars firmly inside the benefit.

That exemption is why the question is being asked so much more than it used to be. In the 2024/25 tax year there were 920,000 recipients of the company car benefit, up from 840,000 the year before — and for the first time more than half, 467,000, were fully electric. Every one of those drivers with a charger at home is a candidate for exactly this conversation with payroll.

What this means in practice

The practical difficulty is not the law, it is the household meter. It cannot tell your car from your dishwasher, and neither can your supplier’s annual statement. If a second EV or a partner’s private car uses the same charger, the difficulty gets sharper still, because now the charger total is not the company car total either.

Most modern home chargers already record what they delivered, session by session. The gap is getting those readings into something payroll can file. That is what ChargeReport does: it connects to your charger once, then produces a monthly statement listing each session with date, time and kWh, plus totals — evidencing the separation HMRC asks for, without anyone having to photograph a meter. Which chargers work without extra hardware is listed on the brand pages.