Why can't I add Fuel Benefit for an Electric Car?

Background

You are offering fuel cards to allow your employees to charge their electric car, both onsite and at public chargers, so you are trying to add a fuel benefit to the car allocation.

Reason

The P11D Organiser will not allow you can't add fuel to a fully electric car, which is in line with HMRC's legislation. As far as HMRC is concerned electricity is not a 'fuel' and does not attract a benefit charge for an employee. If you have a look at the Employment Income Manual (article EIM23900 - Car benefit: special cases: issues relating to electric cars) you should be able to see the relevant legislation. You can also run through the 'quick test' at this site: Check if you need to pay tax for charging an employee’s electric car.

This is the relevant statement "Electricity does not sit within the meaning of fuel so the Fuel Benefit Charge does not apply. And there is no further benefit charge as s239(4) ITEPA 2003 specifically excludes a benefit connected with a taxable car. "

This can also be seen in the Office for Low Emission Vehicles document "Tax benefits for ultra low emission vehicles", where section 6.4 says "As electricity is not a road fuel, the car fuel benefit charge does not apply to electric charging. If an employee uses a company car, no BIK arises on charging their vehicle at the workplace."

Advisory Fuel Rate (AFR)

Employees with a fully electric company car can still claim mileage, but the Advisory Fuel Rate (AFR) is currently set at 8p per mile (correct as of June 1 2024, meaning that if you decide to reimburse more than that, a taxable benefit will arise - see this article for more information: What's the Difference Between AFR and AMAP?