From 1 September 2025, HMRC has introduced updated advisory fuel rates - including a new rate for electric vehicles charged at public charging points. It’s a long overdue change, recognising the reality that public charging is often significantly more expensive than charging at home.
Electric car mileage rates from 1 September 2025:
8p per mile - for home charging
14p per mile - for public charging
Just like petrol and diesel rates, these advisory rates can be used to:
Reimburse employees for business mileage in company cars
Calculate private mileage repayments, where employers cover charging costs (e.g. via a company credit card)
A step forward – but not without complexity
While the new rate recognises the growing use of public charging, employers still face some key challenges:
Blended journeys - where a trip includes both home and public charging, it may be unclear which rate to apply.
System limitations - most employee expense platforms aren't set up to handle multiple rates for the same vehicle.
Cost shortfalls - the public charging rate assumes 51p/kWh, but many rapid chargers cost significantly more, meaning some employees may still be under-reimbursed.
Can you pay more than the advisory rate?
Yes - if you can demonstrate that your actual cost per mile is higher, you can reimburse employees accordingly without triggering additional tax or NIC. This will require robust evidence and processes, particularly for larger fleets. If no evidence is held, any excess could be treated as taxable earnings.
How we can help
Adopting the new rate is a step towards fairer reimbursement - but it’s not straightforward. Our Employment Services team has extensive experience on advising employers how to optimise their company car fleets and manage expense reimbursements in a tax-compliant way.
If you need support reviewing your expense policy, updating your systems or just want to sense-check your approach, we’re here to help.