19 October 2023

HM Revenue and Customs (HMRC) has amended guidance for EIM23900 and NIM06440 to reflect changes in the interpretation of the underlying legislation, section 239 of ITEPA 2003.

Following a review of its position, HMRC accepts that reimbursement for energy used to charge a company provided electric car or van falls within the exemption of section 239. This means reimbursement of domestic electricity bills in relation to charging a company vehicle (not owned by the employee) will not create a benefit in kind. This applies regardless of the vehicle use, whether private, business or mixed, as long as the car is not owned by the employee.

Previous guidance from HMRC advised that such a reimbursement may be a taxable benefit.

This has been reflected in the flowchart provided in EIM23900. However the “Check if you need to pay tax for charging an employee’s electric car” tool has yet to be updated.

Please note, employers will need to be able to ensure the reimbursement made relates solely to the charging of the vehicle.  

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