Closing 2025/26: The Company EV Mileage Evidence File

The end of the 2025/26 tax year is a useful control point for company EV mileage. Payroll should be able to reconstruct not only what was paid, but why each rate and treatment was selected.

That matters this year because HMRC's advisory electric rates changed several times, including the introduction of separate home and public charging rates. A spreadsheet containing only employee names, miles and totals does not explain which vehicle was in scope, which rate version was used or how an exception was approved.

This guide sets out a practical evidence file for UK employers reimbursing business mileage in fully electric company cars. It is general operational information, not tax or legal advice.

Start with a precise scope statement

HMRC says its advisory fuel rates apply only to employees using a company car. The rates can be used to reimburse business travel in a company car or to calculate what an employee repays for private fuel. They must not be used in other circumstances.

For this year-end file, record that the process covers:

• a car provided by the employer

• a fully electric powertrain

• business travel reimbursed by the employer

• claims falling within the 2025/26 tax year

  Record exclusions just as clearly. This file does not cover:

• employee-owned vehicles

• electric vans or other commercial vehicles

• hybrid company cars, which HMRC treats as petrol or diesel cars for advisory fuel rate purposes

• ordinary commuting or private travel

• the employee's repayment of private electricity

  Those cases require a different workflow or separate review. A year-end sample should not combine them under one electric mileage heading.

Preserve the rate history, not just the final rate

HMRC reviews advisory fuel rates quarterly. A year-end reviewer therefore needs the rate treatment applied to each journey, based on its effective date and any documented one-month transition, not the latest number visible in a policy document.

The published electric company-car rates during 2025/26 were:

For each rate version, retain:

• the effective dates used in the expenses or payroll system

• the HMRC source or archived rate table relied on

• the date the internal table was approved and activated

• the person or function that approved the change

• any documented use of the permitted one-month transition from a previous rate

  The published figures are advisory benchmarks. They are not approval of an employer's policy. HMRC says an employer may use its own rate to reflect its circumstances, including where the cost of business travel is higher, but the employer needs to be able to show that higher cost per mile.

Build the file in five layers

1. Vehicle and employee scope

The first layer should establish why each claim belongs in this process. Retain a reliable vehicle identifier, the employee or driver identifier, the date the company car was available and confirmation that it was fully electric.

Avoid relying on the claim description “EV”. That does not distinguish a company car from an employee-owned car, a van or a hybrid.

2. Journey record

HMRC's employer record-keeping guidance says employers should keep the date and details of expenses and benefits. Its travel example says to retain when and why the employee travelled and, where possible, receipts as evidence.

For mileage claims, a reviewable record normally includes:

• journey date

• business purpose

• start and destination

• business miles approved

• claim and payment references

• approver and approval date

  The evidence file does not need to duplicate every field from the expenses system. It needs a stable link to the source record so that Payroll can reproduce the result.

3. Charging basis

From September 2025, the published rates distinguished residential and public charging. The record should therefore show how the charging basis was assigned.

For a claim using one charging category, retain the declared category and the evidence required by the employer's policy. For mixed residential and public charging, retain the apportionment method and inputs.

HMRC says mileage may be apportioned according to how much charging happens at each location and that the calculation should be fair and reasonable. HMRC does not prescribe a single formula. The evidence file should therefore label the calculation as the employer's method, state the assumptions and apply the method consistently.

4. Rate decision and calculation

For every payment in the review sample, retain or be able to reproduce:

• the rate applied

• the rate's effective date

• the miles multiplied by each rate

• the resulting payment

• the reason for any manual adjustment

  If the employer used a rate above HMRC's advisory figure, link the claim to evidence that supports a higher electricity cost per mile. HMRC explains that an unsupported excess must be treated as taxable profit and earnings for Class 1 National Insurance purposes.

  Do not use a charging receipt alone as proof of business mileage. A receipt may support electricity cost or charging location, but the journey record supports the business purpose and miles.

5. Exceptions and sign-off

Keep an exceptions register separate from the routine claim population. It should state:

• what departed from the standard method

• who reviewed the case

• what evidence was considered

• the decision and its rationale

• whether Payroll treatment changed

• whether the issue requires a policy or system update

  At year end, Finance, Payroll and the process owner should sign off the version of the method that was used. Unresolved cases should have an owner and a target resolution date rather than disappearing into an email thread.

A simple year-end reconciliation

Prepare these totals before year end, then run them after 5 April for the full 2025/26 population:

1. Miles claimed: total approved business miles by employee and vehicle.

2. Payments calculated: miles multiplied by the applicable rate or documented alternative.

3. Payments made: amounts actually paid through expenses or payroll.

   The three totals will not always match without explanation. Timing differences, rejected claims, corrections and exceptions may be legitimate. The control is to identify and resolve the differences, then retain the reconciliation and sign-off.

   Also test for category errors:

• employee-owned vehicles in the company-car population

• vans or hybrids coded as fully electric cars

• claims using a rate outside its effective period

• public rates applied without the charging basis required by policy

• duplicate journeys or duplicate payment references

• manual overrides without approval

Retention and personal data

HMRC's employer guidance says records supporting expenses and benefits must be kept for three years from the end of the tax year to which they relate. It says the records should demonstrate accurate reporting and correct end-of-year forms, and that HMRC may ask how each item was accounted for.

That requirement does not justify collecting unlimited employee data. ICO guidance on data minimisation says personal data should be adequate, relevant and limited to what is necessary. Its storage-limitation guidance says organisations should be able to justify retention periods, review what they hold and delete or anonymise information when it is no longer needed.

Apply those principles to the evidence file:

• collect only fields needed for the reimbursement decision and record-keeping purpose

• restrict access to relevant Finance, Payroll and control owners

• define a retention period and review date

• remove unnecessary card details, personal notes and unrelated journey information

• keep the evidence file secure and separate from general shared folders

Before the file is closed

Use this final review:

• [ ] Every claim is tied to a fully electric company car.

• [ ] Employee-owned vehicles, vans, hybrids and non-business travel are outside the population.

• [ ] Every rate has a source, effective date and internal approval.

• [ ] Mixed charging uses a documented, reviewable employer method.

• [ ] Higher-rate exceptions link to evidence and a decision.

• [ ] Mileage, calculated payments and paid amounts reconcile.

• [ ] Exceptions have owners and outcomes.

• [ ] Retention and access rules are documented.

  The result should be a compact decision record, not a dump of every receipt and email. A reviewer should be able to select a payment, identify the applicable method and follow the evidence without rebuilding the process from memory.

Official sources available by 3 April 2026

• HMRC, Advisory fuel rates

• HMRC, Expenses and benefits for employers: record keeping

• HMRC, Expenses and benefits for employers: deadlines

• ICO, Data minimisation

• ICO, Storage limitation

Turn the evidence file into an operating method

The Company EV Reimbursement Pack turns one UK entity's fully electric company-car method into policy wording, rate logic, evidence requirements and Payroll controls. Employee-owned vehicles, vans, hybrids and tax or legal advice require separate scoping.