Legislation
New split rates for electric vehicles
Date
Effective 1 September 2025
Summary
From 1 September 2025, HMRC introduced two Advisory Electric Rates (AERs) for company car drivers: one for home charging and one for public.
The new rates are:
- 8p per mile for home charging
- 14p per mile for public charging
Until September, electric vehicles had just one flat rate. The split recognises the growing number of electric company cars on the road and the higher cost of public charging compared with charging at home.
If employees use both charging methods, HMRC expects employers to apply a reasonable method of apportionment. Employers can also reimburse above the advisory rates if they can show that fuel costs per mile are higher, for example when using ultra-fast chargers.
Petrol, diesel and LPG vehicles continue to have three rates based on engine size.
To stay compliant, you should:
- Update travel and reimbursement policies to reflect the new split rates
- Clearly define business mileage
- Provide guidance on recording home and public charging costs
HMRC has not yet issued detailed guidance on applying the new rates, so clear record-keeping and fair apportionment methods remain essential in the meantime.
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