Advisory Electricity Rate 2026: the 15p claim you are missing

The Advisory Electricity Rate is the single most misunderstood number in company-car motoring, and from 1 June 2026 HMRC left it at two figures that most drivers still treat as one: 7p a mile for charging at home, and 15p a mile when you charge on the public network (gov.uk). That split, unchanged again this quarter, is worth real money, and if your employer is still paying you a flat rate for every business mile in an electric company car, one of you is getting the sums wrong. I want to show you exactly where the gap is and how to close it.

The Advisory Electricity Rate in 2026: the key facts

• Home charging: 7p per business mile from 1 June 2026 (HMRC).
• Public charging: 15p per business mile, more than double the home rate.
• Why it split: public charging now costs roughly twice what home electricity does.
• Who it is for: drivers of fully electric company cars reclaiming business mileage.
• The catch: many employers still pay a single flat rate and short-change public chargers.

What the two rates actually are

For years HMRC published one Advisory Electricity Rate for company-car EVs, a single pence-per-mile figure an employer could pay tax-free for business journeys. That fell apart once public charging prices ran away from domestic electricity, so in September 2025 HMRC split the rate in two, and it has stayed split ever since. From 1 June 2026 the home rate sits at 7p a mile and the public rate at 15p a mile (HMRC), and the two are not interchangeable: which one applies depends on where you actually plugged in.

The maths behind the figures is not a mystery. HMRC builds the home rate from an electricity cost of 26.9p per kWh divided by an average efficiency of 3.59 miles per kWh, which lands at 7p. The public rate uses the same efficiency but an assumed 54p per kWh, which is why it more than doubles to 15p. In other words, the gap is not HMRC being generous on the road; it is HMRC catching up with what a rapid charger genuinely costs, a point I make every time someone tells me their EV is “basically free” to run. It is cheap at home and decidedly not cheap on a motorway, as our breakdown of EV running costs and insurance keeps showing.

Who can claim, and how the money works

This is where it pays to be precise. If you drive a fully electric company car and do business miles, your employer can reimburse you at the Advisory Electricity Rate with no tax to pay on either side. Pay the right rate for where you charged, and the reimbursement is clean. The problem is that plenty of payroll departments never updated their systems after the split, and still pay a single flat figure, usually the lower home rate, for every business mile regardless of where the electricity came from. That quietly costs the driver who charges on the road.

Put a number on it. Say you cover 8,000 business miles a year in a company EV, and half of those, 4,000 miles, are topped up on public rapid chargers between client visits. At 15p a mile those public miles should reclaim £600. If your employer pays the flat 7p home rate across the board, you get £280 for the same driving, and you are £320 a year out of pocket on the public portion alone. That is the whole game: 8p a mile, multiplied by every business mile you charge away from home. Over a three-year company-car cycle it is close to £1,000 you simply did not ask for.

The Advisory Electricity Rate gap most drivers leave on the table

The reason this slips through is that the rate is advisory, not mandatory. An employer is allowed to reimburse less, and many do, because nobody is forcing them to track where you charged. They are also allowed to reimburse your actual cost if it is higher and you can evidence it, which on today’s public tariffs it often will be. What an employer cannot do is pretend the 15p rate does not exist while you are funding business trips on 80p-a-kWh chargers out of your own taxed salary.

Two drivers in identical electric company cars can reclaim wildly different amounts for the same business trip. The only variable is whether their employer knows there are now two rates.

So the practical move is dull but effective: keep your charging receipts, log which miles were public and which were home, and submit them at the correct rate. If payroll only knows the 7p figure, send them HMRC’s published advisory rates and ask for the public rate on the miles you charged away from home. This is the same buyer’s-side discipline I bang on about with the 2026/27 BiK bands and with running costs generally: the electric company car is brilliant value at 4% benefit-in-kind, but only if you actually claim what you are owed. The new Mercedes GLC EV and the BMW i5 on salary sacrifice are only the bargains they look like once the mileage maths is right.

Home charging, private mileage and the fuel-benefit trap

There is a second, quieter use for the home rate that catches drivers out the other way. If your employer pays for all your charging, including private mileage, that is a taxable benefit unless you repay the private miles, a point HMRC sets out in its electric-car benefit manual. The home rate is the figure you use to do that, and at 7p a mile it is cheap to settle. Get it wrong and HMRC can treat the free private charging as a perk to be taxed, which on a high-mileage year is a nasty surprise nobody budgeted for. It is the mirror image of the public-charging gap: in one direction you are owed money, in the other you owe a small amount, and both turn on knowing which rate applies.

None of this changes the headline case for an electric company car, which remains the strongest in the tax system. What it changes is how much of that value actually reaches your bank account. The drivers who treat the Advisory Electricity Rate as a single number, or let payroll do it for them, are the ones quietly subsidising their own business trips, and it is worth reading alongside our look at what EV drivers now pay in VED so you have the full running-cost picture.

Where I’d push back before signing off your mileage

If you run an electric company car and do any meaningful business mileage, I would not sign off another expense claim until I knew which rate my employer was paying. The home rate at 7p is fine for the miles you genuinely charged at home, but the moment you are plugging into public rapids on company business, 15p is the number, and accepting less is handing back roughly 8p for every one of those miles. For most reps and field staff that is hundreds of pounds a year, and it is the easiest money you will reclaim all year because the rate is published and the rule is plain. My advice is blunt: keep the receipts, split the miles honestly, and claim the public rate when you earned it. This is general guidance rather than personal tax advice, and your exact position depends on your scheme and your employer’s policy, so check both before your next claim.