Electric vehicle drivers with company cars have received a small boost this month, with HMRC reducing the home charging advisory fuel rate from 8p to 7p per mile. The new rates came into effect on 1 December 2025.
New Electric Vehicle Advisory Rates
| Charging Location | Previous Rate | New Rate (Dec 2025) |
|---|---|---|
| Home charging | 8p per mile | 7p per mile |
| Public charging | 14p per mile | 14p per mile |
Why the Home Rate Has Dropped
The reduction reflects falling domestic electricity costs. The rate is based on an electrical efficiency of 3.57 miles per kilowatt hour, combined with current home electricity prices.
Mixed Charging: How to Calculate
Many electric company car drivers charge at both home and public locations. HMRC allows you to apportion the mileage based on how much charging happens at each place.
For example, if you charge 70% at home and 30% at public chargers, you can claim:
- 70% of miles at 7p
- 30% of miles at 14p
The calculation should be fair and reasonable, based on your actual charging patterns.
EV Running Costs vs Petrol and Diesel
Even with these rates, electric company cars remain significantly cheaper to run:
| Vehicle Type | Rate (typical) |
|---|---|
| Electric (home charging) | 7p per mile |
| Electric (public charging) | 14p per mile |
| Small petrol (up to 1400cc) | 12p per mile |
| Medium petrol (1401-2000cc) | 14p per mile |
| Large petrol (over 2000cc) | 22p per mile |
| Small diesel (up to 1600cc) | 12p per mile |
| Large diesel (over 2000cc) | 18p per mile |
Home-charged electric vehicles remain the cheapest option for business mileage at just 7p per mile.
Benefit in Kind Advantages
Combined with lower Benefit in Kind (BIK) tax rates, electric company cars continue to offer significant financial advantages for both employers and employees compared to petrol and diesel alternatives.
Transitional Period
The previous rates from September 2025 can still be used until 1 January 2026, giving employers time to update their systems.
Key Takeaways for EV Drivers
- Home charging is now even more cost-effective at 7p per mile
- Public charging costs double the home rate at 14p per mile
- Track your charging locations to accurately apportion claims
- EVs remain the cheapest company car option for running costs