1 October 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.
