In the last edition, we outlined HMRC’s Advisory Fuel Rates (AFRs) from 1 September 2025. One update worth noting is that there are now two separate rates for fully electric company cars, depending on where the vehicle is charged.
From 1 September 2025:
These rates are reviewed quarterly and are designed to help employers reimburse employees for the cost of business mileage in a company car. They’re also used when calculating the VAT element of business fuel, and for employees repaying an employer for any private mileage used.
Key Updates to HMRC Guidance
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If the cost per mile of using public chargers is higher than the AFR, a higher rate can be used, as long as there is evidence to support it.
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Where a company car is charged both at home and at public chargers, mileage can be apportioned to reflect the split.
This development reflects the practical reality that public charging is generally more expensive than residential charging, and it gives more flexibility where electric vehicle charging habits vary.