Ensure your EV mileage policy passes HMRC's split 7p/15p rate test
Updated on
From 1 June 2026, HMRC applies two Advisory Electricity Rates (AERs) for fully electric company cars:
7p per mile for home charging
15p per mile for public charging
Fleet and finance leaders must separate charging contexts, update payroll mapping, and keep evidence for PAYE audits.
Why this matters in 2026
The split reflects real cost differences between home and public charging and turns reimbursement into a compliance test. Incorrect policies can trigger payroll exposure, driver disputes and distorted TCO tracking.
Understanding the current split
| Charging context | Cost/kWh | kWh/mi (approx 0.25) | Cost/mi | HMRC AER |
|---|---|---|---|---|
| Home charging | around 27p | 0.25 | around 7p | 7p |
| Public slow/fast charging | around 54p | 0.25 | around 15p | 15p |
If your public charging cost per mile exceeds 15p, you can evidence the higher rate.
What fleets should change now
Mileage capture: Add a charging context field: home, workplace, public or mixed.
Expense mapping: Apply the correct rate automatically: 7p / 15p.
Auditing: Review monthly data and flag unusual public-charging patterns.
Driver communication: Update and acknowledge the revised policy.
Payroll export: Include context, rate and total reimbursement per trip.
TCO and budgeting impact
For 1,000 mi/month with 70% home and 30% public charging:
Average = (700 x 7 + 300 x 15) / 1,000 = 9.4 p/mi
vs a flat 15p rate = a material saving while still treating public-charging drivers fairly.
Common pitfalls
Using a blended single rate without evidence.
Keeping 7p/14p in current payroll tables after the June 2026 update.
Missing evidence for higher-than-AER public costs.
Ignoring grey-fleet and salary-sacrifice edge cases.
Policy snippet (copy-paste)
EV business mileage must specify the charging context: home, workplace, public or mixed. Reimbursement applies at 7p/mi for home charging and 15p/mi for public charging, unless evidenced actual public cost per mile exceeds 15p. Claims must include date, purpose, miles and context.
EV Decision Compass solutions
AER Compliance Pack (72h) -> /packages/aer-compliance-pack
Fleet Audit Express -> /audit/express
Related reading
Sources
HMRC - Advisory Fuel Rates: https://www.gov.uk/guidance/advisory-fuel-rates
HMRC - Employer Bulletin: https://www.gov.uk/government/publications/employer-bulletin-october-2025
DfT - Public Charge Point Regulations: https://www.legislation.gov.uk/uksi/2023/1168/contents/made
FRC - FRS 102 update effective 1 Jan 2026: https://www.frc.org.uk/library/standards-codes-policy/accounting-and-reporting/uk-standards/
Zapmap - UK Charging Cost Survey: https://www.zap-map.com/ev-research/
Related reading
More fleet electrification analysis curated for this topic.
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