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The ICAEW’s Tax Faculty considers that HMRC’s guidance on the tax treatment of the reimbursement of electricity costs for charging company-provided wholly electric cars conflicts with the law.
The guidance, for example Employment Income Manual at EIM23900, and HMRC’s online tool Check if you need to pay tax for charging an employee’s electric car: Your payment to your employee counts as earnings both say that reimbursements by employers to employees of the cost of electricity used to charge company-owned, wholly electric cars, available for private use, are subject to tax and National Insurance.
The faculty’s interpretation of ITEPA 2003, s 239(2), in conjunction with s 149(4), is that such reimbursements are included in the car benefit charge.
The faculty and other professional bodies are in discussions with HMRC, with a view to HMRC correcting its guidance and tools.
