HMRC EV Mileage Rules 2026: Practical Notes for Electric Car Claims

Electric vehicles have gone from niche to mainstream in the UK. Over 380,000 new battery electric cars were registered in 2024 alone, and the proportion of business fleets going electric continues to climb. If you drive an EV for business, you need to understand how HMRC mileage rules apply to you — and where EVs come with a genuine financial advantage.

This guide covers AMAP rates for electric vehicles, Benefit in Kind for company EVs, advisory electricity rates, salary sacrifice schemes, charging costs, and VAT recovery.

AMAP rates for electric vehicles: same rates, bigger benefit

The Approved Mileage Allowance Payment rates do not distinguish between fuel types. Whether you drive a petrol car, a diesel van, or a fully electric vehicle, the rates are identical:

• First 10,000 business miles: 45p per mile
• Every mile above 10,000: 25p per mile

This is published on the GOV.UK approved mileage rates page.

Here is why this matters for EV drivers: the 45p rate was set with petrol and diesel running costs in mind. Electricity is substantially cheaper per mile. The average cost of charging an EV at home in the UK is roughly 6-8p per mile, compared with 14-18p per mile for a petrol car. That means AMAP overcompensates EV drivers — the 45p rate covers your actual running cost and then some.

For a self-employed EV driver covering 10,000 business miles, the AMAP claim is £4,500. If actual electricity costs were around £700-800 for those miles, the effective tax-free benefit is significant. This is one of the strongest financial arguments for switching to electric if you drive for business.

Benefit in Kind for company electric vehicles

If your employer provides you with a company car, you pay tax on the Benefit in Kind (BiK). The BiK rate depends on the car’s CO2 emissions, and fully electric vehicles have the lowest rate of any vehicle type.

BiK rates for fully electric cars

Tax year	BiK rate
2024-25	2%
2025-26	2%
2026-27	2%
2027-28	3%
2028-29	4%

These rates are published in the GOV.UK company car BiK rates tables.

To put this in perspective: a company electric car with a list price of £40,000 generates a BiK value of just £800 per year at the 2% rate. A higher-rate taxpayer (40%) would pay £320 in annual tax on that benefit. The equivalent petrol car might have a BiK rate of 25-30%, producing a tax bill of £4,000-4,800 on the same list price.

The 2% rate is frozen through 2026-27, then rises gradually — but even at 4% in 2028-29, electric cars remain far cheaper than any combustion alternative for BiK purposes.

Advisory electricity rate: 7p per mile

When an employee drives a company electric car for business, the employer can reimburse fuel (electricity) costs. HMRC publishes advisory fuel rates for company cars, and the rate for fully electric vehicles is:

7p per mile (current as of the latest HMRC update)

This rate is reviewed quarterly. Check the GOV.UK advisory fuel rates page for the most current figure.

The advisory rate is specifically for company cars — it is the amount an employer can reimburse tax-free for business mileage in a company-provided vehicle, or the amount an employee should repay for private fuel in a company car. It does not apply to employees using their own vehicles (those use AMAP rates instead).

How the advisory rate works in practice

If you drive a company Tesla and cover 500 business miles in a month, your employer can reimburse you 500 × 7p = £35 tax-free to cover electricity costs. No receipts are needed if the employer uses the advisory rate — HMRC accepts it without further evidence.

If the employer pays more than 7p per mile, the excess is taxable. If they pay less, the employee can claim the difference.

Salary sacrifice schemes for EVs

Salary sacrifice is one of the most popular ways to access an electric vehicle in the UK, and the tax savings are substantial.

In a salary sacrifice arrangement, you give up a portion of your gross salary in exchange for a company-provided car. Because the car is a company benefit, you pay BiK tax instead of income tax on that salary portion.

Why salary sacrifice works especially well for EVs

With the BiK rate at just 2%, the effective cost of an EV through salary sacrifice is dramatically lower than buying or leasing privately. Here is a simplified example:

• Car list price: £35,000
• Monthly salary sacrifice: £450 (before tax)
• BiK value: £35,000 × 2% = £700 per year
• BiK tax at 40%: £280 per year (£23.33/month)
• National Insurance saving on £450/month gross sacrifice: meaningful additional saving

The employee gets a new electric car with insurance, maintenance, and breakdown cover typically included, while paying BiK tax of around £23 per month. Compare that with a personal lease of £400-500 per month after tax, and the saving becomes clear.

Salary sacrifice schemes are offered through providers like Octopus Electric Vehicles, Tusker, and LeasePlan. Availability depends on your employer opting into a scheme.

Home charging: can employers reimburse the cost?

Yes. For employees with company electric cars, employers can use the advisory electricity rate (7p per mile) to reimburse home charging costs tax-free. This works regardless of whether the employee charges at home using a standard socket, a dedicated wallbox, or a mix of home and public charging.

For employees using their own electric vehicles, AMAP rates (45p/25p) apply. The AMAP rate is designed to cover all running costs including electricity, so separate charging reimbursement on top of AMAP would be double-counting.

Workplace charging

Employers can provide workplace charging facilities without creating a taxable benefit. Under the legislation introduced in 2018 and extended, electricity provided at or near the workplace for charging an employee’s vehicle is exempt from income tax and Class 1A National Insurance. This exemption currently applies through the 2024-25 tax year and has been extended in practice.

This means an employer can install chargers at the office and let employees charge for free — with no tax consequences for either party.

Public charging and VAT recovery for businesses

If your business pays for public charging directly, you can recover the VAT. The standard VAT rate of 20% applies to most public charging sessions. To reclaim it, you need:

• A valid VAT invoice or receipt from the charging provider
• Evidence that the charging was for business use

Some public charging networks issue VAT-compliant invoices automatically through their apps (such as BP Pulse, Pod Point, and Shell Recharge). Others require you to request a VAT invoice separately.

For sole traders and partnerships, only the business-use proportion of charging costs is recoverable. If 70% of your mileage is business, you can recover 70% of the VAT on charging.

Home electricity complicates VAT recovery because domestic electricity carries a reduced 5% VAT rate, and your energy bill covers the entire household — not just car charging. In practice, most sole traders and small businesses do not attempt to recover VAT on home charging. Instead, they claim the mileage deduction through AMAP, which is simpler and often more valuable.

AMAP vs actual costs for EV owners

Because AMAP rates overcompensate EV drivers relative to actual electricity costs, AMAP is almost always the better choice for EV owners using their own vehicle. The maths strongly favours it.

Consider a self-employed EV driver with 12,000 business miles:

AMAP claim:

(10,000 × £0.45) + (2,000 × £0.25) = £5,000

Actual costs approach (rough estimate for a mid-range EV):

• Electricity: ~£900
• Insurance (business proportion): ~£400
• Servicing: ~£200
• Road tax: £0 (if registered before April 2025) or £190
• Tyres (business proportion): ~£150
• Depreciation/capital allowance: varies widely

Even with generous actual cost estimates of £2,000-2,500 for the business proportion, AMAP produces a claim of £5,000 — roughly double. Unless you are driving an extraordinarily expensive EV with very high insurance premiums, AMAP wins convincingly.

The only scenario where actual costs might compete is a high-mileage driver (over 20,000 business miles) in an expensive vehicle with steep depreciation. Even then, run the numbers both ways before committing — remembering that choosing actual costs locks you in for the life of that vehicle.

EV-specific tracking considerations

Electric vehicles introduce a few wrinkles that petrol cars do not:

Charging detours

If you divert from a business route to charge, the detour is still part of the business journey — you need electricity to complete the trip. Keep the full journey logged as one business trip rather than splitting it at the charger.

Short-trip patterns

EVs are often used for frequent short trips (school run, local errands, commute) mixed with occasional longer business journeys. This creates a high volume of trips to classify. Weekly review is essential — letting trips accumulate for months makes classification unreliable.

Odometer vs GPS discrepancy

Some EV dashboards display slightly different mileage figures than GPS tracking apps, partly because of regenerative braking calculations and tyre calibration. Use one consistent source for your records. GPS-based tracking apps are generally accepted by HMRC, provided the figures are reasonable.

Monthly workflow for EV business mileage

1. Classify journeys weekly — tag each trip as business, commute, or private
2. Handle charging detours — keep them as part of the parent business journey
3. Close each month with a confirmed business mileage total
4. Track your cumulative annual total against the 10,000-mile AMAP threshold
5. Archive summary and raw exports for the month

This prevents the end-of-year scramble and ensures your records are contemporaneous, which is what HMRC values most.

Related UK guides

• HMRC Mileage Rates 2026: Practical AMAP Guide for UK Claims
• HMRC Mileage Calculator Guide 2026: Split Rates Without Mistakes
• HMRC Mileage Log Template: Simple Format for Claim-Ready Records

MileTrack captures journeys automatically, classifies them as business, commute, or private, and exports claim-ready reports with all the fields HMRC expects. See the current UK product page at miletrack.app/en-gb.

Tax note: educational content only, not tax advice.