Is a home charging point tax exempt?

June 14th 2021

Your company is paying for an electric charging point to be fitted at your home. Both you and your partner will use it as you each have electric cars. But will this count as a taxable benefit in kind and what are the tax consequences if you sell your home? Joanne Gibson advises.

The tax position for electric car charging points provided by an employer can be a little tricky. It depends on where the charging point is located and whether it is given in conjunction with a company car or a car that is personally owned by an employee or director.

Charging points for personally owned cars
Where a charging point is provided by an employer at or near the normal workplace, for example the firm’s premises, and it is generally available for use by all employees and directors, there is no benefit in kind. This exemption applies where the electricity is used for business or private mileage. If an employer pays for a charging point which does not meet the requirements of the exemption, such as that it is not available for use by employees generally, say because it’s located at the home of an employee or director, there is a taxable benefit which is calculated using the normal rules. These differ depending on whether the employer owns the car charging point or transfers ownership to the employee or director.

Personally owned cars and private mileage
Where the exemption applies to an electric car charging point it also applies to the electricity paid for by the employer. But where the exemption does not apply and the employer pays for the electricity, the employee is taxable on a benefit in kind equal to the cost of electricity used for private journeys.

The taxable benefit is avoided if the employee reimburses (by 5 July following the end of the tax year) the employer for the cost of the electricity. HMRC’s recommended rate for reimbursement is 4p per mile. If you prefer you can work out your own rate.

Employer-owned cars and charging points
The position for electric car charging points is simpler where the employee or director is provided with an electric or plug-in hybrid company car. An exemption, separate from that for workplace charging points, applies. It covers charging points wherever they are located, including at an employee’s or director’s home.

Employer-owned cars and private mileage
The exemption extends to the cost of electricity paid for by the employer regardless of how it is used. Therefore, the employee and others can use the electricity provided for business or private mileage without it resulting in a taxable benefit. The exemption also applies to electricity provided for use in the company car other than through a dedicated charging point, for example from a standard electric socket or at commercial or local authority vehicle charging points.

Transfer of ownership
As the charging point is fixed to the employee’s home, as the owner of the home, where it is not rented, they also become the owner of the charging point. A change of ownership, actual or effective, does not result in a taxable benefit because the exemption prevents it, even if the employee sells their home.

If the employee has a company car, the provision of a home electric charging point is tax exempt. If the employee does not have a company car, a charging point is only exempt if it’s located at or near their workplace and is generally available for all employees to use. In either case the sale of the employee’s home does not result in a tax charge.