Salary sacrifice EV: what your employer can reimburse for home charging

There is a belief that runs through a lot of salary sacrifice schemes: that because you are giving up salary for the car, the running costs are yours and that is the end of it. For electricity, that is wrong — and it is an expensive kind of wrong, because it usually goes unnoticed for years.

The starting point is simpler than most explanations make it: a salary sacrifice EV is a company car.

The car is a company car, however you paid for it

The car is made available to you by your employer. That is what makes it a company car for tax purposes, and how the arrangement was funded does not change it. What salary sacrifice changes is your payslip, not the status of the vehicle.

There is a further point in your favour for electric cars. HMRC’s manual states that the optional remuneration arrangement rules do not apply to cars with CO2 emissions of 75 grams or less per kilometre. Those cars, it continues, “continue to be taxed on the cash equivalent of the benefit without having to make a comparison with the salary foregone”. A fully electric car sits well inside that threshold.

Why electricity is treated differently from petrol

For a petrol or diesel company car, an employer paying for private fuel triggers the car fuel benefit charge. Electricity does not work that way: it is not treated as fuel for that charge, because s.149(4) ITEPA 2003 excludes it.

That leaves the exemption at s.239(2) ITEPA 2003, which covers the cost of electricity used to charge a company car. In other words: your employer reimbursing what you spent charging the car at home does not create a separate taxable benefit.

What “solely for the company car” means at home

At home, your charger sits behind your own meter. Everything else in the house runs through the same supply, and in many households a second car uses the same charge point. Your electricity bill cannot tell any of it apart, and neither can your supplier’s annual statement.

So the practical question is not whether you are entitled to be reimbursed. It is whether you can show which kilowatt hours went into the company car. Most modern chargers already record this per session; what is usually missing is the step from that data to something payroll can act on.

Where this article stops

One thing deserves to be said plainly rather than glossed over. This article is about an employer reimbursing home charging costs alongside a salary sacrifice car. Whether such a reimbursement could itself be folded into a sacrifice arrangement is a different question, about the reimbursement rather than the car, and it is not one this article answers.

The other boundary worth naming: none of this applies to your own private car. There, reimbursement runs through approved mileage rates instead, and paying for electricity on top is treated as earnings.

What to do about it

Ask your employer whether home charging is reimbursed — many schemes do it and simply never mention it, and some do not do it because nobody has raised it. Then make sure the sessions are recorded, so the conversation is about a figure rather than an estimate.

That is what ChargeReport does: connect your charger once, and each month you get a statement listing every session — date, time, kilowatt hours — with the totals. No extra hardware, no electrician. Which brands work this way is listed on the brand pages, and fleets can find the wider setup under fleet management.