Last updated: 14 October 2026
What are the mileage rates for electric and hybrid cars?
If you use your own electric or hybrid car for business, the approved mileage rates are the same as for petrol and diesel cars: 45p a mile for the first 10,000 business miles in the tax year and 25p a mile after that. If you drive a company car, your employer can reimburse business mileage tax-free at HMRC’s advisory rates instead: the advisory electricity rate (AER) for fully electric cars, and the advisory fuel rates for hybrids, which are treated as petrol or diesel cars.
Your own car
| Business miles in the tax year | Rate |
| First 10,000 | 45p |
| Over 10,000 | 25p |
These rates apply to sole traders using simplified expenses and to employees claiming mileage allowance payments. If your employer pays less than these rates, you can claim tax relief on the difference.
Company cars
For company cars, the advisory rates are lower, because the company pays for the car itself. They only cover fuel or electricity. HMRC reviews them every quarter, on 1 March, 1 June, 1 September and 1 December, and publishes them on gov.uk. Check the current table before setting your reimbursement rate.
Fully electric
Use the advisory electricity rate. Electricity is not treated as fuel for the car fuel benefit charge, so an employer paying for charging a company electric car doesn’t create a fuel benefit.
Hybrid
Hybrids use the petrol or diesel advisory fuel rates for their engine size, even though part of the driving may be electric.
Charging at home
If an employee charges a company electric car at home, the employer can repay the cost of the business-mileage electricity using the AER. Workplace charging for employees is a tax-free benefit.
Example
An employee drives 6,000 business miles in her own electric car, and her employer pays 30p a mile (£1,800). The approved amount is 6,000 × 45p = £2,700. She can claim tax relief on the £900 difference through Self Assessment or online. At 20%, that saves £180.
Company car tax for electric cars
Electric company cars still carry a benefit in kind of 4% of list price in 2026/27, rising to 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30. Hybrid rates depend on CO2 emissions and electric range.
Passengers and business vehicles
Employees can also be paid up to 5p a mile tax-free for each fellow employee they carry on a business journey. The 45p and 25p rates are for cars and vans. Motorcycles have a rate of 24p and bicycles 20p, whatever the type of power.
Records to keep
Keep a log of business miles, and keep charging records if your employer repays home-charging costs. See motoring expense records.
Frequently asked questions
Is the 45p rate the same for electric cars?
Yes, for your own car.
Can employers pay more than 45p?
Yes, but the excess is taxable.
Does an electric company car have fuel benefit?
No. Electricity is not a fuel for this purpose.
Do I pay VAT on mileage claims?
VAT-registered businesses can reclaim VAT on the fuel element, with a receipt.
Related: electric company cars and travel expenses.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with mileage claims for electric and hybrid cars. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
