From 1 September 2025, HMRC has changed the way mileage reimbursement works for electric vehicles.
For the first time, there are now two separate rates instead of a single flat figure. While this might sound like a small detail, for many drivers — especially those using workplace or salary sacrifice schemes — it’s a big step forward.
Until now, EV drivers could claim 7p per mile for business journeys, whether they charged at home or on the public network. That single figure didn’t reflect the reality of charging costs, particularly for people without access to home charging.
Now HMRC has introduced two rates:
- 8p per mile – for charging at home
- 14p per mile – for charging on public networks
The importance of this split is significant. The old system often left drivers out of pocket. Someone driving 10,000 business miles in a year and relying on public charging could be down by £2,000 or more. The new 14p rate better reflects what drivers spend when charging away from home, making reimbursement much fairer.
It’s worth noting that ultra-rapid chargers, which can cost 70–90p per kWh, still aren’t covered. In those cases, employers may need to reimburse at a higher rate if drivers can show their actual costs.
Salary sacrifice schemes have already made electric cars one of the most cost-effective choices for company drivers, thanks to a low Benefit-in-Kind tax rate of just 3% in 2025/26.
Mike Thompson, Chief Operating Officer at Leasing Options, said: “The introduction of split mileage rates is an important recognition of the different costs involved in charging at home compared to using the public network. It provides a clearer framework for both drivers and employers when it comes to business travel, and it should help remove some of the financial uncertainty that has existed until now.
“When combined with the tax advantages of salary sacrifice, these changes have the potential to make electric vehicles an even more practical option for many drivers.”
What Drivers Should Do Next
- Check your business mileage claims – make sure you’re using the new rates.
- Talk to your employer if you regularly use ultra-rapid charging, as costs may still be higher.
- Consider salary sacrifice – the low tax rate and fairer mileage reimbursement mean there’s never been a better time to switch.
To find out more advice on all things electric, check out our designated electric page here
If you’re interested in salary sacrifice – please find out more here
