Call me back

Mileage rates for electric and hybrid cars

There is some confusion related to mileage expenses rates for electric and hybrid company cars. This confusion has occurred because of HMRC’s advisory fuel rates, or approved mileage allowance payments, only cover petrol and diesel cars. Hence, there are no separate ‘approved’ rates for electric or hybrid vehicles.

Currently, while HMRC do identify that employees should be compensate for costs incurred for business travel, they do not currently identify electric charging costs as a ‘fuel’ expense and do not therefore, currently publish separate rates.

HMRC’s advisory fuel rates can be utilized to work out mileage costs in certain situations, for instance, where an employer refund an employee for fuel they have used on business travel in a company car, or where an employee is required to refund the cost of fuel used for private travel. Where the employer uses the advisory fuel rates (or lower rates) then no liability to tax or NICs will appear on the payments and they do not need to be report to HMRC.