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Employer Bulletin: August 2018
HMRC now accepts that if employers pay up to four pence a mile when reimbursing employees for business travel in a fully electric company car there is no taxable profit and no class 1 National Insurance.
Employers can use a different rate if, for example, their cars are more efficient, or the cost of business travel is higher than the guideline rate. However, if they cannot show the electricity cost is higher, the employer will have to treat any excess as taxable profit and as earnings for class 1 National Insurance purposes.
The advisory electricity rate will be published alongside advisory fuel rates. See Employer Bulletin 73.
