Free electricity from chargepoints at or near the workplace is tax free for employees charging their own electric or plug in hybrid vehicles, provided charging is open to employees generally and is not offered through salary sacrifice. For company cars, electricity is not “fuel”, so there is no fuel benefit charge, and an employer can install a home chargepoint or reimburse home charging costs without a further benefit. For an employee’s own car, a home chargepoint or reimbursed home electricity is normally taxable.

What does the workplace charging exemption cover?

Section 237A of the Income Tax (Earnings and Pensions) Act 2003 says no income tax arises on the provision, at or near an employee’s workplace, of facilities for charging a battery of a vehicle used by the employee, including a vehicle in which the employee is a passenger. “Facilities” includes electricity but does not include workplace parking, which has its own exemption.

HMRC’s Employment Income Manual at EIM01035 says the exemption applies from 6 April 2018 and covers:

  • the cost of the electricity
  • the cost to the employer of providing the charging facilities
  • any connected services

Section 237A expressly excludes taxable company cars and vans, so in practice it covers employees’ own vehicles. Company cars and vans are left out because those are dealt with under section 239 (see below), with the same practical result: charging a company car at work creates no extra benefit.

What conditions must the employer meet?

EIM01035 lists four requirements:

  1. Location. The chargepoints must be at or near the employee’s workplace. The exemption does not apply to charging at the employee’s home.
  2. General availability. Charging must be available to the employer’s employees generally, or to all employees generally at that workplace. Restricting free charging to directors or senior staff fails this test.
  3. No optional remuneration. The benefit stays taxable if it is offered in conjunction with an optional remuneration arrangement, such as salary sacrifice. Section 237A is a “relevant exemption” for the purposes of section 228A.
  4. Driver or passenger. The vehicle must be one the employee drives or travels in as a passenger.

HMRC’s example has a couple who share lifts to work. When Mrs X drives Mr X to his office and uses his employer’s chargepoint, the charge is still exempt because Mr X is a passenger.

The exemption does not cover the employer paying for charging away from its premises. EIM01035 gives the example of reimbursing an employee’s cost of charging at a motorway service station; that falls outside section 237A.

How are company electric cars treated?

For a company car the employee already pays tax on the car benefit, and section 239(4) ITEPA 2003 exempts other benefits connected with a taxable car. HMRC’s table at EIM23900 sets out the results:

What the employer provides Company car Employee’s own car
Charging at a workplace chargepoint No taxable benefit Exempt under section 237A if the conditions are met
Chargepoint installed at the employee’s home No taxable benefit (section 239(4)) Taxable benefit based on cost to the employer
Charge card for public chargepoints No taxable benefit (section 239(4)) Taxable benefit based on cost to the employer
Solar panels or a home battery Taxable benefit: too remote from the car Taxable benefit based on cost to the employer

EIM23900 also confirms that electricity does not come within the meaning of fuel, so the car fuel benefit charge does not apply when an employer pays for charging a fully electric company car. Plug in hybrids are different because they also run on road fuel, and HMRC’s charging checker tells employers to use the company car and fuel benefit calculator for hybrids.

Can an employer reimburse home charging costs?

Company cars

Yes. EIM23900 says the exemption in section 239(2) means there is no separate charge under the benefits code when an employer reimburses an employee for electricity used to charge a company car at home or at a public chargepoint, whether the car is used for business or private journeys. HMRC’s National Insurance Manual at NIM06440 says these payments are disregarded for Class 1 and no Class 1 or Class 1A is due. The employer must make sure the reimbursement is solely for charging the company car, not the household’s general electricity.

The practical challenge is measuring the cost. HMRC publishes advisory fuel rates for company cars, reviewed quarterly on 1 March, 1 June, 1 September and 1 December. They include an advisory electricity rate for home charging and a separate public charging rate for fully electric cars. HMRC’s guidance says these rates only apply to company cars, and can be used to reimburse business travel or to work out what an employee should repay for private use.

Where the employee charges a company car at home and is not reimbursed, EIM23900 says they are entitled to a deduction under sections 337 and 338 for the electricity cost of business miles.

Employees’ own cars

Reimbursing home electricity for an employee’s own car is not covered by any charging exemption. Under EIM23900:

  • reimbursement for private use is taxed as earnings, and NIM06440 says it is earnings for Class 1 too
  • reimbursement calculated by reference to business mileage falls under the approved mileage allowance payment (AMAP) rules, with any excess over the approved rates taxable
  • a flat rate payment towards charging is taxed as earnings

The approved rate for cars for 2026 to 2027 is 55 pence a mile for the first 10,000 business miles and 25 pence after that, with 55 pence applying to all business miles for National Insurance. HMRC says the approved rate covers the cost of owning and running the vehicle, electricity included, so reimbursing charging on top of the full approved rate for the same journeys produces a taxable excess. If the employer pays less than the approved amount, the employee can claim mileage allowance relief on the shortfall.

A worked example

Illustration only. A firm installs six chargepoints in its car park and lets any employee use them free of charge. It also has two staff with company electric cars.

  • Ben charges his own electric car at work most days. The electricity is exempt under section 237A because charging is open to all staff at the site.
  • Carla has a company electric car. The firm pays for a chargepoint at her home and reimburses the electricity used by the car, measured from the charger’s app. Neither creates a benefit, beyond her existing company car benefit.
  • Dan drives his own electric car on business and the firm also pays for a home chargepoint for him. The chargepoint is a taxable benefit at its cost to the firm, reported on form P11D with Class 1A National Insurance. His business mileage is paid at the AMAP rate.

If the firm instead offered workplace charging only to staff who gave up salary for it, every user would be taxed on the benefit under the optional remuneration rules.

Is there tax relief for the employer’s chargepoint costs?

For the business, HMRC’s Capital Allowances Manual at CA23156 explains that section 45EA of the Capital Allowances Act 2001 gives a 100% first year allowance on new and unused plant or machinery for electric vehicle charging points, including the chargepoint, related groundworks and the electrical supply installed solely for it. Expenditure must be incurred by 31 March 2027 for corporation tax or 5 April 2027 for income tax. Expenditure that does not qualify for the first year allowance may still qualify for other allowances under the normal capital allowances rules.

What are the common mistakes?

  • Treating a home chargepoint for an employee’s own car as exempt because workplace charging is exempt. Section 237A only covers charging at or near the workplace.
  • Reimbursing an employee’s whole household electricity bill instead of the electricity used by the company car.
  • Applying the advisory electricity rate to employees’ own cars, when HMRC says those rates apply only to company cars.
  • Offering charging, or chargepoint installation, through salary sacrifice and assuming it stays tax free.
  • Paying for public charging cards for employees who drive their own cars without reporting the benefit.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.