HMRC has introduced new advisory mileage rates for electric vehicles (EVs) that vary depending on where the vehicle was charged – either at home or on a public network. While this adds complexity, it’s actually good news for drivers of company owned EVs who’ve been stuck with the old flat rate of 7p per mile since it was introduced.
That said, this update requires you (and your people) to track mileage in a way HMRC has never required before. Luckily, we’ve adapted our platform to keep you compliant. And in this piece, we’ll dive into the changes in more detail – and explain how our platform has been enhanced to help you manage these new regulations.
What’s happened: The new HMRC EV mileage rates
On 1 September 2025, HMRC implemented new advisory mileage rates specifically for electric vehicles. The good news? Both rates represent significant increases from the previous single rate. The new guidance sets two distinct rates based on the vehicle’s charging location:
- £0.08 per mile if the EV was charged at the employee’s home (up from 7p)
- £0.14 per mile if the EV was charged using public charging networks (doubling the old rate)
To ease the transition, HMRC has allowed a grace period until 1 October 2025 for full compliance.
At face value, this seems straightforward. However, it introduces a significant procedural change: Employees must now not only track how many miles they travel but also report where their EV was charged before or during the journey. This is a radical departure from the existing system, which has always tied mileage reimbursement to the vehicle and journey alone – not to the source of fuel or energy.
The higher public charging rate also reflects the reality that public charging is more expensive than home charging, partly due to the VAT disparity (5% on home electricity vs 20% on public charging).
Why this matters: Added complexity (but fairer reimbursement)
While the new guidance places additional administrative burdens on both employees and employers, it’s worth remembering this change addresses a real fairness issue. Previously, employees using expensive public charging were reimbursed at the same low rate as those benefiting from cheap home electricity.
Now, the challenges:
- Employees must break down journeys into segments depending on where their company owned EV was charged. For example, if they start a journey from home (where the EV was charged) to a public charging point, that leg is reimbursed at 8p per mile. The remainder of the trip, between public charging points or back home, is reimbursed at 14p per mile.
Note: The advisory rates are still applicable to privately owned EVs where the company wants to reclaim the VAT on the cars charged at public networks. - Employers must ensure their systems can handle multiple rates per vehicle, per journey, and provide accurate reporting for compliance and potential VAT reclaim purposes.
This raises practical challenges, especially for organisations relying on legacy mileage tracking methods or expense systems built around a simpler model where one vehicle equals one mileage rate.
How Webexpenses has adapted
Compliance is paramount and we know how critical it is for you to meet HMRC requirements quickly. Our product team recognised the challenge early on and prioritised changes to support these new rules with a planned rollout by 25 September 2025.
Here’s how we’ve responded:
Flexible mileage rate setup: We’ve introduced the ability to configure multiple EV mileage rates tied to the nature of the charging location and vehicle ownership (company or private). This means businesses can create separate rates for “Home Charging” and “Public Charging” for both company-owned and private EVs.
User-friendly claim process: Our platform allows claimants to select the appropriate rate when submitting mileage claims. Employees can enter multiple claim items per journey, specifying which portion was charged at home and which on public networks. Claimants can use our existing journey mapping tools so users can add multiple destinations, making complex trip breakdowns straightforward. Our ‘recents and favourites’ feature also allows users to save a common charging point they use.
Clear guidance and communication: Recognising that this is a new and potentially confusing process for employees, we provide clear in-app prompts and customer communications. This helps ensure employees know how to submit accurate claims and employers can trust their data.
VAT compliance: For companies reclaiming VAT on mileage, Webexpenses supports the more granular tracking required to align claims with HMRC guidance.
Ongoing monitoring and improvements: We are actively monitoring customer impact and feedback and committed to refining the system as further HMRC clarifications emerge.
In short, Webexpenses offers a ready-made, compliant solution that integrates seamlessly into existing workflows while maintaining the flexibility to adapt to future HMRC policy changes.
A note on card-first expense platforms
Card-first platforms like Pleo have gained popularity by simplifying expense management through company-issued cards that automatically track spend. While this approach works well for many purchases, these changes highlight some limitations when it comes to complex, non-card-based claims like the new EV mileage requirements.
While Pleo does offer mileage tracking that calculates distances and works with HMRC rates, the new EV regulations require a level of granularity that goes beyond traditional mileage tracking:
- Journey segmentation by charging source: The ability to split a single journey into multiple rate categories based on where the vehicle was charged
- Multiple rate configuration: Setting up different rates for the same vehicle depending on charging location
- Complex VAT handling: Managing VAT reclaim on mileage claims with multiple rates and detailed charging data
These nuanced requirements are where comprehensive expense management platforms like Webexpenses can offer more flexibility and control compared to solutions primarily designed around card transactions.
What this all means for you
If your business has EV users, it’s essential to:
- Review whether employees charge their vehicles at home or on public networks
- Update your mileage reimbursement policies to reflect the new rates and tracking requirements
- Implement or upgrade your mileage tracking systems to support multiple rates per journey
- Communicate clearly with employees about the changes and the new claim process
We’ve made this process as simple as possible, reducing admin burden and ensuring your claims are compliant with HMRC’s guidance.
Final thoughts
HMRC’s new EV mileage guidance represents a significant change that could easily disrupt business expense processes if left unmanaged. However, with the right tools and proactive adaptation, it’s entirely manageable – and ultimately fairer for EV users.
This won’t be the last time HMRC tinkers with expense regulations. As the UK continues to evolve its approach to sustainable transport, tax policy, and business expenses, we can expect more changes ahead. What sets us apart is our ability to adapt quickly to these shifts – we’re UK-based, UK-focused, and built to handle the complexities of British tax law and regulatory changes.
Our rapid response to the new EV mileage rates underlines our commitment to supporting customers through change – providing clarity, compliance, and control when the rules inevitably shift again.
If you’re still relying on card-first services or manual spreadsheets to track EV mileage, now is the time to think again. The complexity of these new rates demands a solution that’s flexible, comprehensive, and built for the real-world challenges of expense management.
Want to learn more or see how Webexpenses can help your organisation navigate these changes? Contact our team today.
