HMRC’s latest Advisory Fuel Rates (AFRs) have been published on 1 December 2025 and there’s an important update for anyone driving fully electric company vehicles. 

Introduced for the first time in September, two separate rates now apply for fully electric cars, depending on where the vehicle is charged. The latest rates are as follows:

     •  7p per mile – when the vehicle is charged at home 

     •  14p per mile – when charged using public charging facilities 

These rates are reviewed quarterly and are designed to help employers correctly reimburse employees for the cost of business travel in company cars. They also play a key role in calculating the VAT element of business fuel. Employees can also use them when repaying their employer for any private fuel usage. 

What’s new in HMRC’s guidance? 

HMRC has added some helpful clarifications: 

• Using a higher rate when needed   

If the actual cost per mile using a public charger exceeds the AFR, employers or employees may use a higher rate, as long as they can demonstrate the real cost per mile

• When both home and public charging are used   

If a journey includes charging at both residential and public locations, mileage can be apportioned to reflect the proportion charged at each type of facility

• Apportionment must be reasonable   

Any split between public and home charging should be done on a fair and reasonable basis, with a clear method behind the calculation. 

If you’d like help understanding these changes or how they affect your business, please get in touch – we’re always happy to help. 

Internet link: HMRC AFRs