HMRC has introduced separate mileage reimbursement rates for home and public charging of electric company cars, alongside the latest Advisory Fuel Rates (AFRs) for the new quarter.

From 1 September 2025, fleets will need to apply two different Advisory Electric Rates (AERs) – one for home charging and another reflecting the higher costs of charging at public stations.

This change follows long-standing concerns from the fleet sector that the single AER did not adequately cover real-world charging expenses.

Fleets can still pay above the advisory rates if they can demonstrate higher actual costs. For example, if public charging works out more expensive per mile than the new AER, businesses may reimburse at a higher rate, provided they have evidence to support the cost.

The updated figures are based on an average EV efficiency of 3.59 miles per kWh, weighted by car sales, combined with electricity cost data for both domestic energy and public slow/fast chargers (under 50kW).

The home charging rate is calculated using the domestic electricity cost per kilowatt-hour, published annually by the Department for Energy Security and Net Zero. This figure is then adjusted in line with the latest electricity price estimates from the Office for National Statistics (ONS).

The public charging rate is based on the slow or fast public charge cost per kilowatt-hour from Zapmap’s monthly Public Charging Price Index, covering chargers under 50kW. This too is updated using the most recent ONS electricity price data.

Alongside the new electric vehicle rates, HMRC has also published the latest Advisory Fuel Rates (AFRs) for petrol, LPG, and diesel company cars. Petrol rates remain unchanged from Q3, but there are small increases for diesel vehicles:

• For diesels up to 1600cc, the rate rises from 11ppm to 12ppm.

• For diesels over 2000cc, the rate increases from 17ppm to 18ppm.