Electric cars and the 45p rate

The rules here are simpler than people expect, but they land in a way that surprises everyone the first time.

If the EV is yours

You claim the same approved mileage rates as any other car: 45p a mile for the first 10,000 business miles in the tax year, then 25p.

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.

This is quietly one of the better deals in the tax system. The approved rate is designed around the running costs of an average car — including petrol at petrol prices. If you charge mostly at home on a cheap overnight tariff, your actual cost per mile can be a small fraction of 45p, and you keep the difference.

Charge exclusively on the rapid network at motorway prices and the gap narrows considerably. It can close entirely.

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 is the advisory electricity rate, published by HMRC alongside Advisory Fuel Rates and revised on the same quarterly cycle.

It is a pence-per-mile figure for reimbursing business mileage in a company EV, and it is a lot lower than 45p, for exactly the reason it should be: you are being reimbursed for electricity, not for running a car you own.

Claiming 45p for a company EV is the same error as claiming it for a company diesel — common, and expensive 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, and the 10,000-mile threshold is counted across all your own vehicles rather than per car — which is a detail worth getting right when two cars are in play.

Sources

• HMRC — Travel, mileage and fuel rates and allowances
• HMRC — Advisory fuel rates
• HMRC — Business travel mileage for employees' own vehicles

General information for UK drivers, not tax advice. Rates for company vehicles are revised quarterly — check the current table.