HMRC splits EV mileage rates between home and public charging

HMRC has confirmed that from 1 September 2025, company car drivers using electric vehicles will see two separate Advisory Electric Rates (AERs) depending on where they charge.

Home charging: 8 pence per mile

Public charging: 12 pence per mile

Until now, a single AER of 7 pence per mile has applied, but fleets and drivers have long raised concerns that this did not reflect the higher costs of public charging. The updated structure aims to provide more realistic reimbursement rates and reduce the financial gap for drivers who cannot rely solely on home charging.

How the new rates are calculated

The figures are based on:

An average EV efficiency of 3.59 miles per kWh (weighted by car sales).

Domestic energy prices at 27.04 pence/kWh, equating to 7.52 pence per mile (rounded to 8ppm).

Public charging costs at 51.00 pence/kWh, equating to 12.37 pence per mile (rounded to 12ppm).

Charging location Electrical efficiency (miles per kWh) Electricity cost per kWh (pence) Rate per mile (pence) Advisory electric rate
Home charger 3.59 27.04 pence 7.52 pence 8 pence
Public charger 3.59 51.00 pence 12.37 pence 12 pence

 

HMRC has also published latest Advisory Fuel Rates (AFRs) for the new quarter. Petrol rates have been carried over from the third quarter but there are some changes for diesel company cars. The rate for smaller-engined diesels (1600cc or less) rises from 11 to 12ppm while the rate for larger engines (over 2000cc) also rises a penny, going from 17 to 18ppm.

The rise comes after diesel pump prices jumped nearly 2p a litre in July, according to RAC data.

Guidance for fleets

As with other Advisory Fuel Rates, fleets are permitted to reimburse at a higher rate if they can demonstrate that the actual cost per mile is higher. This provides flexibility for organisations whose drivers face higher-than-average charging costs, particularly at rapid or ultra-rapid charge points that are not covered by the base calculation.

The change is expected to bring greater fairness to electric company car users and aligns with HMRC’s quarterly updates to Advisory Fuel Rates for petrol, diesel, and LPG vehicles.

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