Is this benefit in kind worth it?

Notarobo

Firstly, I must apologise for being a complete idiot with anything tax related. It just goes beyond me and I have the utmost admiration for anyone who grasps it all.

Ive had my own electric car for a year and have a charger at home. Probably 80% of my charging annually is via this, to and from work, and I only use public chargers when we go away 3-4 times a year camping plus a few long days out.

Our home energy is currently on a rate of 24.98/kwh anytime.

I just today received an email from work to say that they are pleased to offer me an EV fuel allowance of £900 annually (£75 per month) from 1 April 2026.

On the face of it this to me looks like a good deal as historically my home charging costs have been around the £20-£30 a month.

My concern is that I'll get taxed on the £900 benefit in excess of what Im actually spending so i'll be making a loss. Or am I being dense and overthinking it?

If its important, my annual salary is £65K p/a and Im 62 this year with a 42" waist :)

Go easy on me eh?

Albermarle

I am not an expert but would presume you will lose 40% of the £900 in tax, so leaving you £540 better off.

Unless you are making enough pension contributions, to effectively make you a 20% taxpayer. In which case you would be £720 better off.

Keep_pedalling

The tax rate would have to be in excess of 100% for you to be worse off.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81995931#Comment_81995931

Which it can be in some less common situations like the winter fuel charge.

But if the op has mentioned everything relevant then 40% is likely to be correct. Of course if they are Scottish resident and liable to HICBC it would put a different slant on things!

SiliconChip

I'd be more concerned about the 42 inch waist than the tax you'll be paying!

DRS1

Maybe the employer should start a cycle to work scheme.

Just joking.

silvercar

If you are paying nearly 25p/KWH to home charge you are on the wrong tariff! Even without a compatible car or charger for smart charging, you could be on a tariff that gives you a cheap night time rate and charge then!

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/81995914#Comment_81995914

https://forums.moneysavingexpert.com/discussion/comment/81995931#Comment_81995931

I think the OP's concern about being worse off is because they normally charge at home and the EV "fuel" allowance of £900 per year is only to pay for charging at public chargers, which the OP indicates they only use public chargers on limited occasions so do not spend much there.

So, an allowance of £900 against which £360 tax is suffered but, if the OP spend less than £360 at public chargers, then the OP is worse off.

Can the OP use public chargers more often?

If the concern is not as per the above, then the £900 simply looks like a pay rise of £900. Perhaps by calling it "EV fuel allowance" it avoids NI?

Perhaps it is a fudge to avoid being seen to give a high percentage pay rise. I am aware of a number of employers that have given higher percentage pay rises to lower grade staff than the higher grade staff. This is done under the premise of equality, but results in narrower differentials and may leave some more senior staff rather more disgruntled. A policy to give company EV car drivers an "EV fuel allowance" would allow the differentials between grades to be restored but without actually re-aligning the percentage pay rises given to various grades.