Dual advisory electricity rate for company cars explained

If you keep an eye on advisory fuel rates for company cars, you’ll have noticed that there is now a dual rate for fully electric vehicles. The advisory electricity rate you use depends on whether a car is charged at home or via a public charger – or a bit of both. There are also circumstances where you can use a higher electricity rate. In this article, we aim to provide you with some clarity so that you or your employees don’t miss out.

What is an advisory electricity rate?

An advisory electricity rate is an advisory fuel rate for fully electric cars. Both apply to employees using company cars. The rates are used to either:

• Reimburse employees for business travel
• Charge employees for the cost of fuel used for private travel

The rates should not be used in any other circumstances. HMRC reviews the advisory fuel rates – including the advisory electricity rate – every quarter. These reviews are published on the first days of March, June, September and December.

What is the current advisory electricity rate?

There are currently two advisory electricity rates. As of 1st September 2025, they are:

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

Before September 2025, there was a single advisory electricity rate for company cars. Between 1st June and 31st August 2025 this stood at 7 pence per mile.

Why is there now a dual rate?

There is now a dual rate simply because the cost of electricity varies significantly, depending on whether you are using a home or a public charger.

Under the old, single-rate system, company car users could find themselves under-reimbursed if they used electricity from public chargers. This was a particular problem for people who don’t have home chargers and rely on kerbside chargers. As a result, HMRC introduced the dual rate system.

Problems with the dual advisory electricity rate

There have been teething problems with the new, dual rate system. This is partly because of confusion about when the two rates should apply.

Fortunately, HMRC has now released guidance to clarify the rules. There are two key things to note:

1. If, during a journey, a car is charged at both public and residential locations, you can apportion the mileage based on how much charging happens at each place. This must be ‘fair and reasonable’.
2. If the fuel cost is more than the advisory rates, you can use that amount for your calculations instead.

It’s particularly useful to know that, where needed, you can use a higher rate. However, before you do so, it’s important to understand how HMRC calculates the advisory electricity rate.

From 1st September 2025, the two rates are calculated as follows:

• Home charging. 27.04 pence per kilowatt-hour, based on an efficiency of 3.59 miles per kilowatt-hour (weighted by car sales).
• Public charging. 51 pence per kilowatt-hour, based on the same efficiency.

In most instances, you’re most likely to need to use a higher rate when a driver refuels using a rapid/ultra-rapid public chargers. These usually cost significantly more than normal slow/fast chargers.

Need help?

If you’re still unsure about how the advisory electricity rate applies to your company cars, we can help. If you are a THP client, talk to your account manager today. They’ll be delighted to advise you.