Octopus Energy, a leading UK energy provider, has launched a new system designed to simplify expense reporting for electric vehicle (EV) company car charging. The service automatically invoices employers for business-related home charging costs, even if the employer isn’t an Octopus customer.
The Cost Advantage of Home Charging
Home charging remains the most cost-effective method for EV drivers. Thanks to regulated rates (currently capped at 27p/kWh by Ofgem) and competitive offers from suppliers like Octopus (as low as 7p/kWh overnight), home charging significantly undercuts public options.
For comparison, public DC fast chargers average 76p/kWh, while slower units cost around 54p/kWh, according to Zap-Map data. A typical EV consuming 3.5mpkWh will use roughly 22p per mile of energy, equivalent to around 27mpg in a gasoline vehicle. Most EV trips also incorporate home-based energy replenishment.
HMRC Mileage Rates: A Growing Disconnect
Current mileage rates set by HM Revenue & Customs (HMRC) are facing criticism for failing to reflect real-world EV charging diversity. HMRC’s advisory electric rates (AERs) offer 7p/mile for home charging and 14p/mile for public charging – irrespective of vehicle size. The former overcompensates drivers using off-peak rates (effectively costing 2p/mile in energy), while the latter leaves drivers using rapid chargers out of pocket.
Employers can adjust these rates, but risk tax penalties if their adjustments aren’t demonstrably aligned with actual costs.
Octopus’ Automated Solution
Octopus’ new Home Charging Reimbursement Scheme bypasses these complexities. Drivers select whether charging is for business or personal use when plugging in. Business use triggers automatic cost crediting and direct invoicing to the fleet manager.
The system doesn’t require Octopus customership or specific home chargers but does necessitate a compatible smart charger with data connectivity (legally mandated since 2022). The scheme costs £9.50 per driver per month.
Octopus Fleet: A Comprehensive EV Solution
This reimbursement scheme is part of Octopus Fleet, a broader portfolio including access to the Electroverse network of 1.3 million charging points in 50 countries, expense cards for charging, meals, and tolls, and a range of chargers, solar panels, and batteries.
“Choosing an electric vehicle is easier than ever, but every business operates differently, and we’ve seen that it can be a challenge to scale up electrification efforts and to make the EV switch a no-brainer for drivers.” – Matt Davies, Director of Octopus Electroverse and Octopus Fleet.
In conclusion, Octopus Energy’s automated expensing system addresses a growing pain point in EV fleet management: accurate and streamlined reimbursement for business-related charging costs. This solution removes friction for both drivers and employers, accelerating the transition to electric vehicles by simplifying financial administration.
