Both the Advisory Fuel Rates (AFRs0 and the AER are used to either:
• Reimburse employees for business travel in a company car; or
• Calculate the amount an employee should repay where are required to repay the cost of fuel used for private travel (in a company car).
Up to 31 August 2025, the AER (for fully electric cars) was calculated as a single rate of 7p per mile, reviewed quarterly. From 01 September 2025, the rate was split to make a differential between the advisory rate for home charging and that for public charging, as below:
|
Advisory Electricity Rate
|
Charging type
|
Rate
|
|
Fully electric company cars
|
Home
|
8p
|
|
Public
|
12p
|
ICB commented at the time that two advisory rates meant it is now necessary to establish where the charging took place – i.e. at home or via a public charger. However, HMRC’s guidance did not contain any information for employers.
On 06 October 2025, HMRC updated its guidance to include the following paragraphs about apportionment:
For journeys where a company car is charged at both public and residential locations, you can apportion the mileage based on how much charging happens at each place. The apportionment calculation should be fair and reasonable.
A higher amount than the advisory rates can be used as long as you can show that the fuel cost per mile is higher. Therefore, if the public charger used is higher in cost per mile than the new advisory rate introduced for public charging, a higher rate can be used as long as you can show the cost per mile is higher.
For Bookkeepers
This does not change the guidance that ICB gave members when the new rates were published, although now we have this from HMRC. Where there has been a mix of home and public charging in the same reimbursement calculation / claim from employees, the following applies:
- There needs to be a ‘fair and reasonable’ apportionment – which means the need for increased data gathering that details the charging location; and
- The AER (home and public) is only advisory, and employers can use higher rates – this is not new information and, as before, means that records must be kept demonstrating why a higher was used
