This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our privacy policy for more information on the cookies we use and how to delete or block them.

Electric cars

25 September 2018

Sales of electric cars and hybrids are on the rise: hybrid, plug-in hybrid and pure electric cars made up 8% of the total UK cars sales in August according to the Society of Motor Manufacturers and Traders. In addition, with manufacturers set to bring around 20 pure electric cars to the UK market in the next two years and, with the benefit in kind rate set to fall to just 2% in 2020/21, electric cars are set to take a much larger share of the UK car market. However, it is reasonable to assume that the current government grants to subsidise the cost of electric cars will not last beyond 2020.

HMRC has recognised this growth in uptake recently by creating an approved mileage rate for electric cars for the first time from 1 September 2018. Although electricity is not a fuel for car fuel benefit purposes, employers can pay employees up to 4p per mile for using their own electric car for business purposes. However, hybrid cars are still treated as either petrol or diesel cars when it comes to the advisory fuel rates.

Advisory fuel rates from 1 September 2018:

Engine size

Amount per mile

Petrol / LPG

1400cc or less


1401cc to 2000cc


Over 2000cc



1600cc or less


1601cc to 2000cc


Over 2000cc



Pure electric (plugins)



Employer Essentials Index