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Thanks to EV incentives, business owners can not only boost their business and strengthen their branding through sustainability initiatives but also provide Benefits in Kind (BIKs) to their employees.
Since employees can claim home EV charger installations and EV charging for commute for their company EVs, it has become important for business owners to develop a comprehensive paper trail that can help them remain compliant and transparent.
These kinds of benefits for employees not only have the potential to increase employee retention and satisfaction but are also highly likely to forward the global agenda to move the world towards more sustainable energy alternatives.
If you are a business owner looking to leverage your EV infrastructure and government incentives to provide His Majesty’s Revenue and Customs (HMRC) BIKs, then you are in the right place. This guide will cover how you can build your business’s expense claim funnel and develop new SOPs for documentation, logging evidence, and drafting new policies.
These measures will not only make your business more compliant but will also help develop a long-term road map with sustainability and employee growth in mind.
Read on to learn more about how employees can claim home-to-work EV charging, Advisory Electric Rate (AER) rates, and how you can build better workflows for these claims using evidence and policy templates:
The great thing about the widespread adoption of EV technology is that it is relatively new, and since it has a lot of potential for pushing sustainability and positive implications for global warming, the world is rushing to get this technology to the masses.
One of the ways governments are doing this is by reaching out to the public via incentives. Businesses are being tapped into because the global business landscape now has a much bigger impact on the world through their decisions and operations.
Businesses alone account for much of the carbon and greenhouse gas emissions around the globe. Countries like the UK are actively seeking out new programmes that can help them adopt green energy for the masses, such as the UK’s plan to achieve net zero by 2050.
This is also why there are programmes like the Workplace Charging Scheme (WCS) that empower UK businesses to cut down on their initial EV investment and pass on the benefits to not just their employees but also visitors.
Businesses are even given multiple incentives from the HMRC for the adoption of this technology. These benefits also extend to the employees in the form of HMRC BIKs.
Benefits in Kind (BIK) are a great way for employers to provide added value to employees. These benefits can be tied to salary packages, or they can be extended to all employees equally.
One such BIK is the workplace-paid charging setup that companies provide to employees. Under this benefit, employees can have their employers pay for the EV infrastructure that they install at their homes.
This benefit also includes HMRC benefits since it is tax-free as long as the infrastructure is used to charge company vehicles and not personal EVs. This benefit also includes the use of HMRC AER (Advisory Electric Rate), which is an approved electricity rate that is allowed to employees. When the infrastructure is used as per the HMRC AER, the benefit is tax-free.
From 1 September 2025, HMRC split AER by charging location:
This was done so that companies and employees could easily track their expenditure and be more transparent and compliant in their books. Using this scheme, employees can charge their company-provided vehicles conveniently at home and during their commute.
The overall benefit of this scheme includes:
When it comes to claiming for EV charging, there are a few things to keep in mind, such as what you can and cannot claim.
Let’s look at a few considerations for this benefit:
Commuting is defined as travelling to and from one’s home to their permanent workplace. This means the employee will leave their home in their company-provided EV, reach the workplace, and then come back home. This is considered ordinary commuting and not business travel; therefore, it may not be claimable as “business miles”.
Many companies offer “charging cards” that allow employees an allowance to charge their vehicles for daily commutes. This benefit enables employees to essentially bear zero expense and enjoy the perks of electric cars without paying out of their pocket.
Business owners must clearly mention and define the categories of commute in their policies and have transparent rules that clearly state what is and what is not considered claimable. Businesses must also clearly state the purpose of the charge cards so that employees can use them appropriately.
On the other hand, business travel involves commuting to clients or temporary workplaces like off-site premises. These miles will be claimable as business miles, and how you claim these miles will depend on the vehicle.
There are two sub-categories or types of EVs in the context of this BIK. The first is the company-provided EV.
While using the company vehicle, employees may reimburse business miles using the Advisory Electric Rate (AER) as mentioned above. As per HMRC’s latest guidelines, using this benefit, employers may also reimburse domestic electricity used to charge the company car at home. This would automatically cover business, private use, and commuting. Perhaps the biggest benefit here is that this use is not considered as extra income and therefore is not taxed, so long as the company vehicle is used appropriately.
As per HMRC, the underlying method used for determining the AER is based on the kWh price data + vehicle efficiency. This allows paying above AER if you highlight a higher cost-per-mile from, for example, using expensive public chargers.
It is important to note, however, that workplace charging, which is charging at or near the workplace premises, is a separate BIK exemption which is usually available to all employees and doesn’t apply to home charging.
The second type is an employee’s own EV. This personally owned EV will be subject to Approved Mileage Allowance Payment (AMAP) rates of 45p/25p for business miles, which also cover electricity and running costs. However, commuting for personal vehicles will not be claimable in this scenario.
The process of claiming electricity is straightforward and depends on the mileage or electricity method. For example, according to the simple mileage method for company EVs, you will be allowed the AER per business mile as per your mileage log. This method depends solely on how much the car has travelled and relies on the computer data the EV accumulates during use.
As mentioned above, if you end up paying more due to expensive charging stations or chargers, then you will need to keep evidence of the higher cost per mile for it to be claimable.
The second process is the electricity method for company EVs. Under this method, the reimbursement is based on actual kWh used to charge the company car, even if it includes private/commuting miles. There is no extra income tax for this method if the payment is only for the company car’s electricity. This means that you will have to document it and present the evidence transparently for maximum effectiveness.
Documentation is your best bet at maximising the utility of the charging BIK. When using a company EV and AER, the business mileage log will need to be properly maintained. This includes the date, purpose, start/end, and, of course, the miles travelled.
If the public AER is used, you will need to keep receipts or the app logs to show public network use. You can simply use the report generation option in your EV’s mobile app for more detailed reporting and convenience.
When reimbursing home electricity for a company-provided EV, you will need to maintain a statement that highlights that the reimbursement is solely for the company car’s electricity. In addition to that, the electricity used must have a calculation trail that shows how you derived the overall value of the use of the EV infrastructure at home.
For example, you will need to show the smart-charger data or use the mobile application to obtain kWh logs for the vehicle. If you don’t have the reporting option, then you will need to use the electric vehicle supply equipment (EVSE) meter readings or a reasonable method, like relying on the odometer to calculate the total energy used.
This can be done through the following formula:
(Odometer value x kWh/mi from the vehicle) x domestic tariff,
which includes the unit rate and any EV night rate.
You can also simply show the energy bill that highlights the pence/kWh you used for the company EV. As per the HMRC/NIC guidelines, this method is supported so long as the reimbursement relates only to the company car.
Finally, when using your own EV, you will need to present the business mileage logs. Since the AMAP rates are all-inclusive, you will not need to show any electricity receipts for this type of business travel claim.
If you don’t know where to start with the claims, we have the perfect templates that you can use to process the reimbursements. Here are two ready-to-use templates:
Begin by highlighting the definitions of travel and commute. The definition of business miles and the conditions for reimbursement must also be mentioned clearly and transparently. These miles must be categorised as per the HMRC AER, which is 8p/mile for home charging and 14p/mile for public charging.
You may also benefit by highlighting a sample calculation (like the one done above) to show employees how they can calculate the rate themselves.
This section of the claim will contain all the necessary evidence, such as the mileage log for the claim. For public chargers, you will need to highlight the process for including receipts or app reports if a higher rate was used.
The online portal for submitting claims and attaching evidence must also be highlighted. This would require coordination between the HR, finance, and IT departments for maximum effectiveness.
As per HMRC guidelines, EV charging and use are considered to be tax-free when used under HMRC AER. This must be stated clearly in the tax detail section of the policy. Furthermore, updated references from HMRC’s website must be included.
The tax scope should also be clearly defined on how the employee may be taxed if they plan to use the EV infrastructure for personal use.
When highlighting and defining commuting miles, keep in mind that commuting miles are not generally defined as business miles and therefore they must not be claimed under AER. This should be mentioned in the policy clearly with bold letters so that employees know exactly what type of miles to claim and to avoid delays in the claims.
Here is a policy template for employers with a more complex reimbursement plan:
The purpose of the policy must be clearly defined to include the definition of the type, location, and usage of the EV chargers provided at home. Furthermore, the same details for commuting and reimbursement from the above template will be added here as well.
The goal of this policy is to establish the purpose of keeping business travel claiming simple and to ensure that drivers don’t pay out of pocket for domestic charging for company vehicles.
The payment section of the policy must include details about the category of rates for each type of charging use. For example:
This section will be drafted similarly to the above template. However, business owners must also add details about domestic EV charging facilities.
The evidence presented for home charging will be based on:
In addition to this, the domestic tariff bill, along with a declaration that reimbursement is solely for the company car, must also be uploaded by the employee as required.
The tax section of the policy must transparently state that, as per HMRC, reimbursing home electricity for a company car gives no additional income-tax charge. Therefore, NICs are disregarded if the reimbursement is solely for the company car.
This section of the policy must highlight the appropriate controls placed by the finance department regarding reimbursements and claims. For example, the finance department may set a ceiling or a monthly cap on the reimbursement as needed.
At Calder Electrical, we install EV chargers in line with the current regulations and can offer a government incentive to reduce the installation costs for both domestic and commercial properties.
There are various EV chargers currently on the market, and it can be a little confusing to choose the best one for your needs. We will take out the hassle and provide you with the most suitable and affordable option, ranging from the standard systems to the smart ones that are becoming increasingly popular.
We are authorised and registered OZEV-approved installers, and our charge points come with a 3-year warranty. We offer all kinds of different options to choose from, such as wall-mounted to freestanding pedestal units with different types of chargers and charging speeds.
Contact us here or call us on 0800 612 3001 for our expert opinion and professional services, and more information on claiming for home-to-work EV charging, AER rates, evidence, and policy templates.
Photo by Andersen EV on Unsplash
