MilometryElectric cars and the 55p rate
Why an EV you own uses exactly the same approved rate as a petrol car, why a company EV does not, and how the rate compares with the cost of electricity.
Allgemeine Information, keine Beratung. Als allgemeine Information verfasst und nach unserem Wissen korrekt am 27. September 2026. Steuerregeln ändern sich, und wie sie gelten, hängt von deinen Umständen ab. Dies ist keine Steuer-, Rechts- oder Finanzberatung: Frag eine Steuerberaterin, einen Steuerberater oder das Finanzamt, bevor du dich darauf verlässt.
Updated 27 September 2026: the car and van rate rose from 45p to 55p for journeys from 6 April 2026 (announced 21 May 2026). Figures below use 55p.
The rules here are simpler than people expect, but they land in a way that surprises many people the first time.
If the EV is yours
If you are an employee, your employer can pay you the same approved mileage rates as for any other car, tax free: 55p a mile for the first 10,000 business miles in the tax year, then 25p. If it pays less, you can claim tax relief on the shortfall. Self-employed drivers using simplified expenses deduct the same rates from profit.
There is no separate electric rate, no reduction for the fact you are charging rather than filling up, and no requirement to work out what the electricity cost. The rate is the rate.
The approved rate is one figure for every car, whatever it runs on. If you charge mostly at home on a cheap overnight tariff, the electricity for a business mile can cost a small fraction of 55p. Charge exclusively on the rapid network at motorway prices and the energy cost per mile is much higher.
The rate also has to cover insurance, servicing, tyres and depreciation, so this is not profit.
Approved amount against electricity cost only
An EV owned by you, doing 8,000 business miles, charged at home on an off-peak tariff (illustrative energy costs):
| Figure | |
|---|---|
| Approved amount (8,000 × 55p) | £4,400 |
| Electricity cost at ~2p a mile | £160 |
| Approved amount less electricity only | £4,240 |
The same car charged exclusively on motorway rapids at ~23p a mile:
| Figure | |
|---|---|
| Approved amount | £4,400 |
| Electricity cost | £1,840 |
| Approved amount less electricity only | £2,560 |
Same car, same rate, same journeys. Where you plug in changes the energy cost by more than a thousand pounds. Neither figure is money left over: the approved amount also has to cover insurance, servicing, tyres and depreciation.
If the EV belongs to the company
Different system. Approved mileage rates do not apply, because the company owns the car and bears its costs. What applies instead are the advisory electricity rates, published by HMRC alongside Advisory Fuel Rates and revised on the same quarterly cycle.
There are two pence-per-mile figures, one for home charging and one for public charging, for reimbursing business mileage in a company EV. Both are a lot lower than 55p, for exactly the reason it should be: you are being reimbursed for electricity, not for running a car you own.
Being paid 55p for a company EV is the same mistake as for a company diesel: a common and costly one, because the amount above the advisory rate is normally taxable, and it adds up if it runs for years.
Home charging and company cars
Reimbursement for charging a company car at home has its own treatment and has changed in recent years. If that is your situation, check the current guidance rather than relying on what was true when you got the car.
What to record
Identical to any other vehicle: date, from, to, purpose, distance. The rate you apply differs; the evidence does not.
If you run an EV alongside a petrol car, keep them as separate vehicles in your records. They may be on different systems entirely. For an employee, the 10,000-mile threshold is counted per tax year across all the cars and vans used for that job rather than per car, which is a detail worth getting right when two cars are in play.
Sources
- Travel, mileage and fuel rates and allowances (HMRC)
- Advisory fuel rates (HMRC)
- Business travel mileage for employees' own vehicles (HMRC)
- Increasing mileage rates (HMRC policy paper)
- Income Tax (Earnings and Pensions) Act 2003, section 230: the approved amount (legislation.gov.uk)
- Tax relief for vehicles you use for work (HMRC)
General information for UK drivers, not tax advice. Rates for company vehicles are revised quarterly, check the current table.
