HMRC publishes new rates for employees’ electric cars

Employees with electric vehicles as company cars have seen a change in the rates they can claim for mileage allowance since September 1, but HMRC has updated the guidance on October 6 about how these new rates need to be apportioned for each journey. The previous mileage allowance for business journeys was a flat 7p per mile no matter where the car was charged for each journey, which made calculations much easier. But now, HMRC has made it clear that the new rates of 8p per mile if the car was charged at a residential property or 14p per mile if it was charged publicly must be allocated in proportion to how much of each powered the trip. This new guidance makes it much more complicated for company car owners with electric vehicles, as they will now need to do much more admin to ensure they don’t overclaim on their mileage allowance from HMRC. HMRC states: “The ‘slow or fast public charge cost per kilowatt-hour’ is the Zapmap public charging price index monthly published figure for slow or fast chargers (charging speed less than 50 kilowatts), uprated with the latest estimate of electricity prices from the Office for National Statistics.”

What if my car is charged both at my house and publicly?

Whether you need to charge your car at your home or out and about as you’re driving at a public charging point, you will now need to allocate a proportion of charging time to each business journey. So, it is now vital for employers to keep records showing how each business journey was powered, and whether the electricity was bought at home or at a public charging point to offer proof for each claim to HMRC. This means employees will need to record where the charging of the car took place – at home or at a public network charge point, how many miles each charge covered, and retain evidence of each, such as payment receipts or charging logs and mileage data. In every case, the apportionment to each charge point would need to be fair and reasonable, HMRC said. If the public charging point costs significantly more than the 14p per mile allowed, then it is possible to claim more than the 14p per mile rate. But proof would also be needed from the public charging point if extra is claimed. These rates only apply to purely electric vehicles. Any hybrid cars would be treated as petrol or diesel for the advisory fuel rates. The rates below are from September 1, 2025, and you can use the previous rates for up to one month from the date any new rates apply. This would mean claims up to October 1, 2025, could still use the 7p flat rate.

Charging location	Electrical efficiency miles per kilowatt-hour (weighted by car sales)	Electricity cost per kilowatt-hour (pence)	Rate per mile (pence)	Advisory electric rate
Home charger	3.59	27.04 pence	7.52 pence	8 pence
Public charger	3.59	51.00 pence	14.19 pence	14 pence

 Source: HMRC

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