New two-tier mileage rates for electric vehicles

Advisory fuel rates for company cars are updated by HMRC on a quarterly basis due to fluctuations in fuel prices. The rates determine the amount that can be paid to an employee using a company car for business mileage, or where an employee has to reimburse their employer for private journeys. Where HMRC’s rates are used, there are no income tax consequences for the employee. HMRC has now published the advisory rates applicable from 1 September 2025. The rate per mile will be:

The big difference this time is the introduction of a second electricity rate for fully electric cars. For 1 September, the two rates will be:

• 8 pence per mile for home charging
• 12 pence per mile for public charging