- Charging a Company Car (Private Use): Compensation paid by an employer to an employee for charging their company car at home is considered salary. This is because the electricity is from the employee’s private supply, and the employee is not making an expense on behalf of the employer, so the compensation is fully taxable as income for the employee.
- Charging a Pure Company Car (Business Use): When an employee charges a “clean” company car (used solely for business purposes) at home, the employer’s compensation is not salary. Instead, it’s treated as a tax-free reimbursement of expenses, provided the employee can demonstrate the actual cost of the electricity used for business charging, and this amount can be deducted by the employee in their tax return.
- Key Distinctions and Tax Implications: While free workplace charging is tax-free, home charging is treated differently based on car type. Compensation for company car charging is salary, whereas for pure company cars, it can be a tax-free expense reimbursement if directly tied to actual, documented costs, creating a “zero-sum game” for the employee in their tax return. Standard or non-documented compensation for pure company cars, however, will be treated as salary.
Source Tholin
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