When an employer provides an employee with a company credit card and it is used to pay for roadside charging of an electric company car, specific considerations come into play ...
The good news is that there will be no taxable benefit to the employee, and no National Insurance Contributions (NIC) charge will apply either. That's because the use of a credit card, in this case, is not considered a direct means of providing electricity.
Moreover, electricity is not regarded as a fuel for fuel benefit purposes, and this exemption ensures that no benefit arises, which typically applies to payments made through credit cards or other credit tokens.
It's essential to differentiate this scenario from the provision of electricity by an employer through a workplace charging point, which is covered by a separate exemption. In the latter case, the provision of electricity to a company car is considered a specific facility or means of providing electricity and the exemption encompasses the liability in connection with a taxable car and is not regarded as a fuel benefit.
Regarding National Insurance Contributions (NIC), the liability for Class 1 NIC arises when the credit card is used to pay liabilities for the benefit of the employee, as per section 6 of the Social Security Contributions and Benefits Act 1992. However, no Class 1 NIC applies in cases of business expenses or when the employee acts as an agent for the employer.
In this context, it means that informing the seller that the electricity is being purchased on behalf of the employer allows the employee to act as an agent for the company, and thus, the company credit card usage is not considered a payment for personal liability, but rather a provision of fuel by the employer.
HMRC provides a helpful table on electric cars at EIM23900, but it is subject to changes as the rules and regulations evolve with the increasing adoption of electric vehicles.
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