Date posted: 1st Oct 2025
Advisory fuel rates are used when either:
- The employer needs to reimburse employee for costs the employee has incurred for business travel in their company cars.
- For the employee to reimburse costs that the employer has incurred, where the employee has used the company car for private travel.
On 1 September 2025, HMRC introduced separate mileage reimbursement rates for electric company vehicles: 8p per mile for home charging and 14p per mile for public charging.
Key Details
- Home Charging Rate: 8 pence per mile. This reflects lower domestic electricity costs and is intended for vehicles charged at home.
- Public Charging Rate: 14 pence per mile. This rate accounts for the higher cost of using public charging infrastructure.
- This split addresses the real cost differences faced by drivers, ensuring fairer reimbursement and supporting electric company car adoption.
Impact for Businesses and Employees
- The new rates help employers accurately reimburse business mileage at a rate reflecting the actual charging costs.
- Employees using electric vehicles for work will benefit from more suitable compensation, especially for those unable to charge at home.
- Fleet managers should update policies and payroll systems to reflect these two distinct rates from September 2025.
Advisory
- Plug-in hybrid and hybrid cars continue to be treated as petrol or diesel for reimbursement purposes.
As ever, if you have any queries, please contact us.
