Company Car vs Employee-Owned EV Mileage: Which UK Rules Apply?

Two employees can drive fully electric cars on the same business journey and still fall under different mileage frameworks. The deciding question is not whether the vehicle is electric. It is who provides the vehicle.

• A fully electric company car sits within HMRC's advisory fuel rate framework, which includes advisory electric rates for home and public charging.

• An employee using their own EV for business travel sits within the Mileage Allowance Payments framework, including Approved Mileage Allowance Payments (AMAPs).

  Mixing those two frameworks can create the wrong rate, the wrong evidence request and the wrong payroll treatment. This guide provides a scope test for UK employers before they design or revise an EV mileage policy.

This article is general operational information, not tax or legal advice. Vehicle arrangements, journeys and payments should be reviewed against current HMRC guidance and your organisation's circumstances.

The short answer

The figures above are not interchangeable. A 7p or 15p advisory electric rate is not an employee-owned-car mileage rate. Equally, the 55p AMAP rate is not an electricity-cost benchmark for a company car.

Step 1: decide whether the car is company-provided or employee-owned

Start with the vehicle arrangement recorded by HR, Fleet and Payroll:

1. Did the employer provide the car? If yes, and the car is fully electric, review the company-car advisory rate framework.

2. Is the employee using their own car for business travel? If yes, review the Mileage Allowance Payments and AMAP rules.

3. Is the arrangement unclear? Stop before assigning a rate. Car allowances, employee leasing arrangements and other mixed cases may need specialist review.

   This ownership test should appear at the top of a claim form or decision workflow. Asking only for fuel type is not enough.

Route A: fully electric company cars

HMRC states that its advisory fuel rates apply only to employees using a company car. They can be used when an employer reimburses business travel in a company car or when an employee repays the cost of fuel used for private travel. HMRC also says the rates must not be used in other circumstances.

For fully electric company cars, HMRC publishes separate advisory electric rates for home and public charging. On 25 August 2026, the rates applying from 1 June to 31 August 2026 are:

• 7p per mile for home charging

• 15p per mile for public charging

  HMRC has published the same 7p and 15p rates for 1 September 2026. It reviews advisory rates quarterly, so an operational policy needs an effective-date field and a controlled update process rather than a rate copied permanently into a document.

The published rates are advisory benchmarks

The rates are not a mandatory reimbursement policy and do not certify an employer's process. HMRC says an employer may use its own rates where its cars are more efficient or its business-travel cost is higher than the guideline rate.

Where a higher rate is used, the employer should be able to show that the fuel cost per mile is higher. Without that support, HMRC explains that the excess may need to be treated as taxable profit and earnings for National Insurance purposes.

For a journey supported by both home and public charging, HMRC allows mileage to be apportioned according to how much charging happens at each location. The calculation should be fair and reasonable. A policy therefore needs more than two numbers: it needs a repeatable rule for assigning charging context and retaining evidence when an alternative rate is used.

What this route does not cover

The advisory electric rates discussed here are for fully electric company cars. HMRC treats hybrid company cars as petrol or diesel cars for advisory fuel rate purposes. The standard scope should also avoid silently extending company-car rules to employee-owned cars, vans or other vehicle types.

Route B: an employee's own electric car

When an employee uses their own vehicle for business journeys, HMRC calls employer payments Mileage Allowance Payments. A separate statutory calculation determines the approved amount that can be paid without tax reporting.

For the 2026/27 tax year, HMRC's statutory AMAP tax rates for an employee's own car or van are:

• 55p per mile for the first 10,000 business miles

• 25p per mile after 10,000 business miles

  HMRC explicitly includes electric and hybrid cars and vans in the same vehicle category. There is no separate home-charging or public-charging AMAP rate for an employee-owned EV.

  That distinction reflects the purpose of the framework. AMAP is used to calculate the approved amount for use of the employee's own vehicle on business travel. It is not simply reimbursement of the electricity consumed on one journey.

Payments above or below the approved amount

HMRC's tax guidance distinguishes between payments above and below the approved amount:

• If total payments are above the approved amount, the excess can create reporting and tax obligations.

• If total payments are below the approved amount, the employee may be able to claim Mileage Allowance Relief on the unused balance.

  National Insurance uses a related but separate calculation. For 2026/27, HMRC's mileage allowance payment rate for National Insurance is 55p for every business mile, calculated by earnings period rather than by the AMAP tax-year threshold. Payroll design should therefore capture both tax-year mileage totals and the relevant earnings period, routing exceptions for review instead of treating every payment as a simple expense reimbursement.

The journey must also qualify as business travel

Choosing the right vehicle framework does not by itself make every mile reimbursable within it. HMRC links AMAP and Mileage Allowance Relief to the business-travel rules. Ordinary commuting and private travel do not qualify as business travel for tax relief.

A practical claim control should record at least:

• journey date and business purpose

• start and destination

• business miles claimed

• vehicle ownership or provision type

• vehicle type and powertrain

• cumulative employee-owned car or van mileage for the tax year, where relevant

• charging context and supporting evidence where the company-car process uses it

• rate, effective date and reason for any exception

  These fields do not determine the tax treatment on their own, but they give Finance and Payroll a consistent record on which to make and evidence the decision.

Three common classification errors

1. Paying the company-car electric rate for an employee-owned EV

The 7p and 15p figures are published for fully electric company cars. HMRC says advisory fuel rates must not be used in other circumstances. An employee using their own EV belongs in the employee-owned-vehicle workflow.

2. Paying the AMAP rate for a fully electric company car

AMAP addresses business travel in an employee's own vehicle. Applying it to a company car confuses vehicle use with the electricity-cost benchmark and can misstate the intended payroll treatment.

3. Treating the published advisory rate as compulsory

An employer may use an evidenced rate that reflects its circumstances. The policy decision is therefore not simply “use HMRC's number”. It is “choose a documented method, define the evidence and control exceptions”.

A five-question scope check for Finance and Payroll

Before approving a reimbursement policy or claim, answer these questions in order:

1. Who provides the vehicle: the employer or the employee?

2. Is the journey qualifying business travel rather than ordinary commuting or private travel?

3. If it is a company car, is it fully electric?

4. Which rate and effective date apply to the journey?

5. What records support the ownership, mileage, charging context and any exception to the published benchmark?

   If question one cannot be answered reliably, do not choose a mileage rate yet. If the vehicle is employee-owned, route it away from a company-car advisory electric rate process.

Official sources available by 25 August 2026

• HMRC, Advisory fuel rates

• HMRC, Business travel mileage for employees' own vehicles: overview

• HMRC, Business travel mileage for employees' own vehicles: rules for tax

• HMRC, Mileage Allowance Payments (480: Appendix 3)

• HMRC Employment Income Manual, EIM31240: statutory mileage rates and kinds of vehicle

• HMRC Employment Income Manual, EIM31330: Mileage Allowance Relief

• HMRC, Ordinary commuting and private travel (490: Chapter 3)

Put the company-car decision into an operational pack

The Company EV Reimbursement Pack standard scope covers fully electric company cars: policy wording, rate logic, evidence requirements and Payroll controls. Employee-owned vehicles require separate scoping because AMAP, Mileage Allowance Relief and related reporting questions sit outside that standard company-car workflow.