RELATED: Can businesses charge employees for using workplace EV chargers in the UK?
Why the Exemption Exists
HMRC does not classify electricity as a fuel. This is the key distinction. When an employer provides petrol or diesel for private use, it creates a taxable fuel benefit. Electricity does not trigger the same treatment.
The exemption under current legislation means no additional tax for the employee and no additional National Insurance cost for the employer. Your staff receive free charging at work without it appearing on their P11D. We set up the charging infrastructure to meet the qualifying conditions as part of every installation.
One thing to note. The exemption applies to workplace charging only. If employees charge company cars at home, employers can reimburse those costs tax free under separate HMRC rules updated in October 2023. Home charging of personal vehicles does not qualify for tax free reimbursement.
How It Works With Company EVs
Company electric vehicles already benefit from exceptionally low BIK rates. These are confirmed through to the end of the decade.
| Tax Year | EV BIK Rate |
|---|---|
| 2025/26 | 3% |
| 2026/27 | 4% |
| 2027/28 | 5% |
| 2028/29 | 7% |
Compare that with petrol and diesel company cars at 23% to 37% depending on CO₂ emissions.
At the 2025/26 rate of 3%, an employee driving a £40,000 electric company car pays roughly £240 per year in BIK tax at the basic rate. A similar petrol car at 30% BIK would cost around £2,400 at the same rate. That is a tenfold difference.
Free workplace charging on top of that costs the employee nothing extra in tax under current rules.
RELATED: What is the Workplace Charging Scheme in the UK?
Salary Sacrifice EV Schemes
Workplace charging complements salary sacrifice arrangements. An employee sacrifices pre tax salary to lease a company EV at the low BIK rate, then charges it for free at work. The employer saves on National Insurance contributions on the sacrificed salary.
This combination makes workplace EV charging one of the most effective recruitment and retention tools available. The cost to the business is relatively low. The perceived value to employees is high.
We recommend confirming the details with your accountant for your specific situation. Tax rules can change, and individual circumstances vary.
