A public charger receipt might show 62p per kWh. Your overnight home tariff may have cost 8p per kWh. Neither figure, on its own, tells you what you can claim. Mileage reimbursement for electric cars is governed by the vehicle arrangement, the journey purpose and HMRC rules – not simply by the price of the last charge.
That distinction matters when you are claiming expenses, repaying an employee, or trying to keep a defensible business record. An EV can be cheap to run, but a weak mileage and charging log can still leave you out of pocket or without the evidence your accountant needs.
Start with who owns the electric car
The correct reimbursement method changes depending on whether the car belongs to the driver or the business.
If an employee uses their own electric car for a qualifying business journey, an employer can generally use HMRC’s Approved Mileage Allowance Payments rates. These are the same mileage rates used for petrol and diesel cars: 55p per mile for the first 10,000 business miles in a tax year, then 25p per mile thereafter. The rate is intended to cover the whole cost of using the personal vehicle, not just electricity.
That means it reflects more than charging. Tyres, servicing, insurance, depreciation and the practical cost of having a car available for work are all part of the allowance. It may feel generous on a cheap overnight tariff and less generous after a run of rapid charges, but it is a mileage allowance rather than a repayment of each charging transaction.
If the employer provides the electric car, the usual approach is different. HMRC publishes an advisory electricity rate for business travel in company cars. That rate is designed for reimbursing the electricity used for business miles in an electric company car. It can change, so use the rate that applied on the date of travel rather than relying on an old payroll spreadsheet or a figure quoted in a forum.
The important point is simple: do not apply the company-car electricity rate to an employee-owned vehicle, and do not assume the 55p rate is a direct electricity reimbursement for a company car. They solve different problems.
Mileage reimbursement for electric cars is not a charging refund
For a privately owned EV, mileage reimbursement is usually based on business miles, not on how or where the vehicle was charged. A driver who charges at home, on a workplace charger and at motorway rapid chargers can still submit one mileage claim using the approved rate, provided the journey is genuinely for work and properly recorded.
For a company EV, the advisory electricity rate gives a simpler way to settle business travel. Yet it is still worth recording actual charging costs. The advisory rate may be suitable for tax and payroll, while your actual costs reveal what the car really costs to run.
This is especially relevant where charging is mixed. A home electricity bill does not identify the car’s consumption. A public charging receipt does, but it may include connection fees, parking, subscription pricing or a prepaid credit balance. A workplace charger may show no payment at all. Without a clear record, it becomes easy to confuse a valid mileage claim with a rough estimate of energy spend.
Business mileage itself needs a purpose. Commuting from home to a normal, permanent workplace is normally private travel, even if you charge the car specifically for that journey. Travel to a temporary workplace, a client meeting, a site visit or between business locations may qualify. The facts matter more than the label attached to the trip.
Record the journey before you calculate the claim
A useful mileage record is dull by design. It should show the date, start and end locations, business purpose, miles travelled, vehicle and the rate used. Where the trip is part business and part personal, record only the business portion.
For an employee-owned EV, that information supports the mileage claim. For a company car, it supports both the reimbursement and the separation of business and private use. In either case, a vague entry such as “travel” is a poor substitute for “Birmingham office to client site in Coventry, quarterly review”.
Odometer readings add another layer of credibility. You do not necessarily need to capture them for every single journey, but periodic readings can show that the total claimed mileage is plausible against the vehicle’s actual use. This is useful for self-employed drivers and small businesses where one person may be preparing, approving and paying the claim.
Keep charging information alongside mileage, even when it does not determine the reimbursement rate. Log the date, kWh, amount paid, charging location and receipt where available. For home charging, record the tariff or calculated unit cost used. For prepaid charging blocks, keep the original payment, the kWh or credit received, and the remaining balance. Otherwise, the apparent cost of a charge can be badly distorted by the day you paid for it.
A phone-first log is often more reliable than promising to rebuild the month from bank transactions later. Charging happens one-handed, in the dark, in a wet car park, or between meetings. The record needs to be quick enough to make at the time.
Treat tax, VAT and reimbursement as separate questions
These terms are often bundled together, which causes avoidable mistakes.
Mileage reimbursement is what the business pays the driver for qualifying travel. Tax treatment determines whether that payment can be made without creating a taxable benefit or additional earnings. VAT recovery is a separate question again, with its own conditions and evidence requirements.
An employer paying an approved mileage allowance for an employee’s own vehicle is not simply buying electricity from that employee. Similarly, a business cannot assume that every element of a 55p-per-mile payment carries recoverable VAT. The VAT position depends on the qualifying fuel or electricity element, the business’s VAT status and the evidence retained.
For company EVs, private charging paid for by the employer can create benefit-in-kind questions, particularly where the payment covers private motoring rather than business travel. Workplace charging has its own rules and exemptions in some circumstances. The detail is fact-specific, so a tax adviser should review any arrangement involving directors, home electricity payments, regular private charging or unusual reimbursement policies.
The practical discipline remains the same: retain receipts, distinguish business from private use, and avoid creating a policy that payroll cannot explain. An accurate record does not guarantee a particular tax outcome, but it gives your accountant something real to work with.
Use your actual cost per mile for decisions, not just claims
The approved mileage rate is useful, but it is not a verdict on whether your EV is economical. It is a reimbursement mechanism. Your real operating cost can be markedly lower or higher depending on your charging mix, efficiency, maintenance, finance costs and annual mileage.
For example, an EV averaging 3.5 miles per kWh costs roughly 2.9p per mile in electricity at a 10p-per-kWh home tariff. At 70p per kWh on a rapid charger, the same energy use costs 20p per mile before any session fees. Neither figure includes tyres, servicing, insurance or depreciation.
That is why an honest view needs more than a single charging average. Track energy-only cost per mile, then running cost per mile including maintenance and recurring vehicle costs, and finally total cost of ownership if you want to include finance, depreciation and other major items. Compare those figures with a petrol baseline based on your own fuel price and real mpg, not a manufacturer claim.
Amperlo is built around that distinction: a mileage claim can be recorded at the correct rate while your charging, receipts, VAT splits, maintenance and total vehicle costs remain visible in the same ledger. The result is an auditable financial record rather than a promotional saving figure.
Set a policy that survives a busy month
For small businesses, a short written policy prevents most disputes. State which rate applies to personal and company vehicles, whether employees need to submit claims monthly, what journey details are required, and who approves them. Include a clear rule for mixed journeys and a process for checking the current advisory rate.
Do not make drivers prove every home charge merely to submit a valid approved mileage claim for their own EV. Equally, do not accept a total mileage figure with no destinations or business reason. The right level of evidence is enough to support the payment without turning a straightforward claim into unpaid admin.
Review the data periodically. If business mileage is rising but recorded charging and odometer trends do not broadly support it, ask questions early. If a company EV spends most of its time on expensive rapid charging, the tax-compliant advisory reimbursement may still be right, but the operational cost needs attention. Perhaps workplace charging, a home charger, route planning or a different tariff would change the numbers.
The best mileage record is not the one that produces the biggest claim. It is the one that lets you show, months later, where the miles went, what was reimbursed, what electricity actually cost, and what your car actually costs to run.
