Switching to an electric company car is not only better for the environment, it can also be tax-efficient for both you and your limited company. But once the paperwork’s signed and the EV is on your driveway, there’s one big question:
What can the company actually pay for without creating a nasty tax surprise? Let’s break it down:
1. Charging costs
The company can pay for:
- Public charging for business trips
- Workplace charging points (installation & running costs – exempt from Benefits In Kind (BIK) for all use)
- Home charging costs for business miles – reimbursed at HMRC’s Advisory Electric Rate (currently 7p per mile) or if your charging unit at home can provide a report showing the usage this can also be used to reimburse you.
2. Maintenance & servicing
Fully allowable if the company owns or leases the car:
- Annual service and MOT (if applicable)
- Tyres (including winter tyres)
- Brake fluid, wipers, bulbs
- Paid software updates
3. Accessories & equipment
If needed for business use, your company can cover:
- Charging cables/adaptors
- Roof racks/storage (for work equipment)
- Home wallbox charger (if the company owns the car) – but personal use could trigger BIK unless it’s agreed as part of the company’s EV scheme
4. Insurance & roadside assistance
The company can pay for:
- Comprehensive insurance (with business cover)
- Breakdown recovery (including EV specialist services)
5. Parking, tolls & congestion charges
- Covered if incurred during business travel.
What the company can’t pay without tax implications
Some costs will be treated as a taxable benefit if covered by the company:
- Electricity for private mileage (unless reimbursed to the company)
- Fines & penalties (parking tickets, speeding fines)
- Personal upgrades (e.g., premium sound system, private plates)
With a UK limited company, you can legitimately put most EV-related business costs through the books – from the car itself to charging, insurance, and maintenance. Just keep business and personal use clearly recorded to avoid unnecessary BIK tax. If you have any questions, don’t hesitate to get in touch.