TL;DR
HMRC has updated its advisory electric rate to 15p per mile for company-car electric vehicle drivers. The rate sets the maximum tax-free reimbursement employers can pay for business mileage in a company-owned electric car.
HMRC has updated the advisory electric rate that employers use to reimburse business mileage in company-owned electric cars to 15p per mile. The new rate replaces the previous 9p figure and reflects the cost of public rapid charging, which has climbed faster than home-charging costs since 2022.
What the advisory electric rate is
HMRC publishes advisory fuel rates every three months for company-car drivers reimbursing business mileage. The figures apply only to journeys made in a company-owned car for business purposes and only when the employer does not provide the fuel directly.
Until the latest revision the rate for fully electric company cars was 9p per mile. The new 15p figure brings the published rate closer to typical real-world charging costs, particularly where drivers rely on public rapid chargers rather than home charging.
Who the rule applies to
The 15p rate applies to company-car drivers using fully electric vehicles. Plug-in hybrid drivers continue to use the petrol or diesel advisory rate corresponding to engine size. Drivers using their own private electric car for business travel are reimbursed under the separate Approved Mileage Allowance Payment, which remains at 45p per mile for the first 10,000 miles.
Employers can reimburse below the advisory rate without tax consequences. Paying more than the published rate without evidence of higher costs is treated as a taxable benefit and reported on the P11D form.
How the new rate compares with charging costs
Public rapid charging in the UK now costs roughly 70 to 85 pence per kWh, while home charging on a domestic tariff is closer to 25 to 30 pence per kWh. The 15p per mile rate assumes a mix of charging behaviour and a typical efficiency of around three to four miles per kWh for newer EVs.
Drivers who rely heavily on public chargers may still find the rate falls short of actual expenditure. Employers can pay a higher rate if they hold evidence the employee's per-mile cost exceeds the advisory figure.
How to claim the right amount
Drivers should record business mileage along with the date, journey purpose and start and end points. HMRC accepts logbook records as long as they are contemporaneous and verifiable.
Employers process reimbursements through payroll or expenses. The reimbursement is tax-free at or below the published rate, so the employee receives the full amount without deduction.
Wider HMRC fuel rate changes
HMRC also updates petrol and diesel rates each quarter, with bands for different engine sizes. The latest revision reflects pump price movements and is published on gov.uk's advisory fuel rates page.
Drivers using their own car for business journeys claim through the separate Approved Mileage Allowance Payment scheme rather than the advisory rates. The AMAP figures remain at 45p per mile for the first 10,000 miles and 25p above that, with 24p per mile for motorcycles and 20p for bicycles.
Key facts
- Advisory electric rate increased to 15p per mile.
- Rate applies to fully electric company cars only.
- Approved Mileage Allowance Payment for private cars stays at 45p for the first 10,000 miles.
- Public rapid charging now costs roughly 70 to 85p per kWh.
- HMRC reviews advisory fuel rates every three months.
FAQ
Who can use the new 15p per mile rate?
Company-car drivers using a fully electric vehicle for business mileage where the employer does not provide the electricity directly. Private-car drivers use the separate 45p Approved Mileage Allowance Payment instead.
Does the rate cover plug-in hybrids?
No. Plug-in hybrid drivers continue to use the petrol or diesel advisory rate that matches the engine size of the vehicle. HMRC treats hybrids as petrol or diesel cars for this purpose.
Can my employer pay more than 15p per mile?
Employers can pay above the rate if they hold evidence the actual cost per mile is higher. Without that evidence the excess is treated as a taxable benefit and reported on the P11D form.
When does the new rate take effect?
The advisory fuel rates page on gov.uk shows the effective date for the latest revision. Employers usually adopt the new rate from the publication date but can keep using the previous figure for up to a month.
