HMRC AER Update 2026: 7p Home Charging, 15p Public Charging

From 1 June 2026, HMRC's Advisory Electricity Rates for fully electric company cars are:

• 7 pence per mile for home charging

• 15 pence per mile for public charging

  For UK fleet, finance and payroll teams, this is a policy, payroll and evidence update. It affects reimbursement rules, claim forms, driver communications, TCO models and audit readiness.

What changed?

HMRC introduced separate home and public Advisory Electricity Rates in 2025. The June 2026 position is now 7p for home charging and 15p for public charging.

Many fleet policies still reference one of the previous positions:

• a single EV reimbursement rate

• 8p/14p from the first split-rate period

• 7p/14p from the December 2025 update

  Those references should remain only where they are clearly historical. Current claim forms, payroll tables and policy snippets should use the current rates.

What must be updated now?

Finance and payroll teams should check five areas first.

1. Expense and payroll systems Update EV mileage rate tables to 7p home / 15p public.

2. Driver claim forms Add or validate a charging context field: home, workplace, public or mixed.

3. Written reimbursement policy Explain when each rate applies and who owns exceptions.

4. Audit evidence Keep a versioned policy, the HMRC source date, the approval owner and the calculation method.

5. Driver communication Explain the change clearly so drivers do not assume the public rate applies to every EV mile.

How should mixed charging be handled?

HMRC says mileage can be apportioned where a company car is charged at both public and residential locations. The calculation should be fair and reasonable.

Practical methods include:

• driver-level declarations, for example whether the driver has home charging access

• claim-level tagging, where each mileage claim includes charging context

• sample-based apportionment, reviewed periodically against charging data

• charge-card or telematics evidence where available

  The key is consistency. The method should be written down, approved and applied in the same way to similar drivers.

Can you reimburse above AER?

Yes, but only with evidence.

HMRC's advisory rates are not hard caps. If an employer pays above the advisory rate, it must be able to show that the actual fuel cost per mile is higher. Without that evidence, the excess can create payroll and tax risk.

For fleets, any above-AER public charging exception should have a documented rule, supporting data and an approval trail.

CFO checklist

Use this checklist before the next payroll cycle:

• Replace current-rate references to 7p/14p with 7p/15p.

• Keep historical 8p/14p or 7p/14p references only where the rate period is explicit.

• Update reimbursement calculators and TCO models.

• Add home/public/mixed charging context to claim workflows.

• Define the fair and reasonable apportionment method.

• Document who approves above-AER exceptions.

• Archive the policy version and HMRC source date.

• Send driver communications before the first affected claim run.

Source

The official source is HMRC's Advisory Fuel Rates guidance, last updated on 22 May 2026 for rates from 1 June 2026.

Where EVDecisionCompass helps

The AER Compliance Pack gives UK fleets a 72-hour path from outdated reimbursement logic to an audit-ready framework.

You receive:

• AER policy wording updated for 7p home / 15p public

• a reimbursement calculator and AER engine

• payroll and expenses guidance

• driver communication templates

• a CFO summary and implementation checklist

  Book your AER Compliance Pack