Ensure your EV mileage policy passes HMRC’s split 8p/14p rate test
Updated on
From 1 September 2025, HMRC applies two Advisory Electric Rates (AERs):
8p per mile for home charging
14p 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 2025–26
The split reflects real cost differences between home and public charging and turns reimbursement into a compliance test. Incorrect policies can trigger benefit-in-kind exposure and distort TCO tracking.
Understanding the split (illustrative)
| Charging context | Cost/kWh | kWh/mi (≈0.25) | Cost/mi | HMRC AER |
|---|---|---|---|---|
| Home (overnight tariff) | ~30p | 0.25 | 7–8p | 8p |
| Public rapid | ~55p | 0.25 | 13–14p | 14p |
If your public charging cost per mile exceeds 14p, you can evidence the higher rate.
What fleets should change now
Mileage capture: Add a “charging context” field (home / workplace / public).
Expense mapping: Apply the correct rate automatically (8p / 14p).
Auditing: Review monthly data; flag outliers (e.g., >40% public miles for drivers with home chargers).
Driver communication: Update and acknowledge the revised policy.
Payroll export: Include context, rate and total reimbursement per trip.
TCO & budgeting impact
For 1,000 mi/month with 70% home and 30% public charging:
Average = (700×8 + 300×14) / 1,000 = 9.8 p/mi
vs a flat 14 p rate = ~30% saving on energy cost.
Common pitfalls
Using a blended single rate (e.g., 11p) — non-compliant.
Missing evidence for higher-than-AER public costs.
Ignoring grey-fleet and salary-sacrifice cases.
Policy snippet (copy-paste)
“EV business mileage must specify the charging context (home, workplace or public). Reimbursement applies at 8p/mi (home) and 14p/mi (public), unless evidenced actual public cost per mile exceeds 14p. Claims must include date, purpose, miles and context.”
EVDecisionCompass solutions
AER Compliance Pack (72h) → /packages/aer-compliance-pack
Fleet Audit Express → /audit/express
Related reading
Sources
HMRC — Advisory Fuel Rates (Electric, Oct 2025)
DfT — Public Charge Point Regulations 2025
FRC — FRS 102 update effective 1 Jan 2026
Zapmap — UK Charging Cost Survey 2025
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