HMRC AER Update: 7p Home and 15p Public from September 2026

HMRC updated its Advisory Fuel Rates guidance on 21 August 2026. From 1 September 2026, the Advisory Electricity Rates for fully electric company cars are:

• 7 pence per mile for home charging

• 15 pence per mile for public charging

  The electric rates are unchanged from the preceding quarter.

  These rates only apply to employees using fully electric company cars. Employee-owned vehicles, vans and hybrids sit outside this scope. Hybrid company cars are treated as petrol or diesel cars for Advisory Fuel Rates.

What the rates mean

The rates are advisory. Employers can use them when reimbursing business travel in company cars or calculating repayment for private fuel. An employer can use its own rate where it can demonstrate the underlying fuel cost per mile.

Where a fully electric company car is charged at both residential and public locations, HMRC says the mileage can be apportioned. The calculation should be fair and reasonable.

Using the published rates does not amount to HMRC approval of an employer's wider policy or controls.

What Finance and Payroll can review

1. Scope Confirm the process is limited to fully electric company cars and business mileage.

2. Rate table Record the effective date and the source used for the rate decision.

3. Charging basis Decide how home, public and mixed charging are recorded or apportioned.

4. Alternative rates Keep the evidence and approval trail for any rate above the advisory rate.

5. Ownership Name the person who reviews quarterly HMRC changes and payroll exceptions.

Source

The official source is HMRC's Advisory Fuel Rates guidance, updated on 21 August 2026 for rates from 1 September 2026.

Where EVDecisionCompass helps

The Company EV Reimbursement Pack turns one UK entity's current method, sample claims and evidence into a finance-ready decision and operating controls within three UK business days after complete inputs. It covers fully electric company cars only and costs £990 ex VAT.

You receive:

• documented policy wording for the selected method, including the advisory rates or an evidenced alternative

• a reimbursement calculator and exception framework

• payroll and expenses controls

• driver communication templates

• a CFO summary and implementation checklist

  Review the Company EV Reimbursement Pack