HMRC sets separate EV mileage rates for home vs public charging

HM Revenue & Customs (HMRC) has announced a significant change to mileage reimbursement rules for electric company cars, introducing separate Advisory Electricity Rates (AERs) for home and public charging for the first time.

From 1 September 2025, the single current rate of 7p per mile will be replaced with two distinct rates: 8p per mile when the vehicle is charged at home; and 12p per mile when using a public charger.

The change follows long-standing calls from the fleet sector to reflect the higher costs associated with public charging.

“It is encouraging to see that HMRC continues to listen to the sector. The BVRLA and AFP have collaborated on this topic since 2021. Since then we’ve seen a regular review of AER introduced, plus today’s news that public and private rates will be split. Both were core changes we have pushed for. 

“Policy change is rarely rapid, but this is a great reminder that change does come when we work together. Focus now turns to a ‘rapid charging’ rate as the current 12p is not reflective of what many drivers will be experiencing.”

The new AER figures are based on an electric vehicle efficiency rate of 3.59 miles per kWh, weighted by car sales data, combined with electricity pricing data:

• Home charging costs use figures from the Department for Energy Security and Net Zero, uprated with the latest electricity price estimates from the Office for National Statistics.
• Public charging costs are derived from Zapmap’s monthly Public Charging Price Index, covering slow and fast chargers under 50kW, also adjusted with ONS data.

Charging location	Efficiency (miles/kWh)	Electricity cost per kWh	Cost per mile	AER rate
Home charger	3.59	27.04p	7.52p	8p
Public charger	3.59	51.00p	12.37p	12p

HMRC has also published updated Advisory Fuel Rates (AFRs) for petrol, diesel, and LPG vehicles for the new quarter. Most rates remain unchanged, but diesel drivers will see slight increases:

• Diesel cars 1,600cc or less: up 1p to 12p per mile
• Diesel cars 1,601cc to 2,000cc: 13p
• Diesel cars over 2,000cc: up 1p to 18p per mile

Petrol and LPG rates remain the same. The previous AFR and AER rates can still be used for up to one month after the new rates take effect.

The move is expected to benefit company car drivers who frequently rely on public charging, as the previous single-rate structure failed to reflect rising public charging costs. However, fleet operators are still calling for additional rates for rapid charging, where costs can be substantially higher than the new 12p rate.