AER — Advisory Electricity Rate
Benchmark mileage rate set by HMRC for reimbursing EV drivers.
From 1 December 2025: 7p/mile (home charging) and 14p/mile (public charging). (The split was introduced at 8p/14p on 1 September 2025; the home rate was cut to 7p in the December 2025 HMRC review.)
For fleet managers: a key reference for mileage claims, expense policies, and cost modelling. Using actual data instead of AER can justify higher reimbursements. See AER (2025) and HMRC guidance.
WLC/TCO — Whole-Life Cost / Total Cost of Ownership
Comprehensive cost measure for comparing EVs and ICE cars.
Includes: lease/purchase, depreciation, fuel/electricity, insurance, service, tyres, VED, CC/ULEZ, and resale value.
For fleet managers: the standard tool for procurement decisions and CFO reporting. Shows where EV savings offset higher list prices.
BiK — Benefit-in-Kind (company cars)
Tax employees pay on personal use of a company car.
Calculated as P11D value × BiK %, with the rate lower for EVs. Employers also pay NIC.
For fleet managers: directly impacts driver take-home pay and attractiveness of EVs in company car policies. Clear communication to staff is essential.
NIC — National Insurance contributions
Payroll contributions on salaries and benefits.
For company cars: employers pay Class 1A NIC on the BiK value.
For fleet managers: adds a hidden cost to fleet budgets — must be factored into WLC alongside BiK and lease/fuel costs.
VED — Vehicle Excise Duty (vehicle tax)
Annual UK road tax.
From 1 April 2025, zero-emission vehicles are no longer exempt from VED.
- First registration on/after 1 April 2025: Year 1 = £10, then £195 per year (standard rate) from Year 2.
- Expensive Car Supplement: if the vehicle’s list price is over £40,000, an additional supplement applies from Years 2 to 6.
- Vehicles first registered between 1 April 2017 and 31 March 2025 move to the standard rate (£195) at renewal after the change.
- Vehicles first registered between 1 March 2001 and 31 March 2017 remain at £20 per year.
Impact for fleets: remember to include Year-1 vs standard rates correctly in TCO models and apply the supplement where list price exceeds £40,000.
See GOV.UK: Vehicle Excise Duty and our VED (2025) guide.
Cleaner Vehicle Discount (CVD) / London Congestion Charge
The Cleaner Vehicle Discount (full exemption for eligible EVs and hydrogen vehicles) ended on 25 December 2025.
- From 2 January 2026, electric vehicles must pay the Congestion Charge. The daily rate increased from £15 to £18.
- EV discounts (Auto Pay required): 25 % for cars (= £13.50/day) and 50 % for vans/HGVs (= £9/day).
- Phase 2 from 4 March 2030: discounts reduce to 12.5 % for cars and 25 % for vans/HGVs.
Impact for fleets: update routing, budgeting and driver guidance for London; factor the new CC cost into WLC/TCO reviews.
See TfL’s ULEZ and Congestion Charge consultations for the latest updates.