Futures and Commodity Market News

Aug 26, 2025 (MarketLine via COMTEX) --

HM Revenue and Customs (HMRC) has announced a split in the advisory electricity rate (AER) for electric vehicles (EVs), distinguishing between home and public charging.

Effective from 1 September, the new rates aim to more accurately reflect the costs incurred by company car drivers when charging their EVs.

Company car drivers will now be reimbursed at a rate of eight pence per mile (ppm) for electricity consumed during home charging.

This rate is calculated based on an electricity cost of 27.04p per kilowatt-hour and an average electrical efficiency of 3.59 miles per kilowatt-hour, a figure weighted by car sales.

For public charging, the reimbursement rate has been set at 12ppm, acknowledging the higher costs associated with using public charging networks.

The public charging rate uses the same efficiency metric but is based on an electricity cost per kilowatt-hour of 51p.

This figure is derived from the Zapmap public charging price index for slow or fast chargers (less than 50kW), which is then adjusted using the latest ONS estimate of electricity prices.

In addition to the AER changes, HMRC has also updated the advisory fuel rates (AFRs) for diesel company cars, with some adjustments in the ppm rates, while the rates for petrol vehicles remain the same.

Liquefied petroleum gas (LPG) vehicle rates remain unchanged at 11ppm for vehicles up to 1,400cc, 13ppm for vehicles with engine sizes between 1,401cc and 2,000cc, and 21ppm for vehicles with engines exceeding 2,000cc.

HMRC's quarterly review of rates considers a range of data sources, including manufacturers' information on mean miles per gallon (MPG), adjusted for annual business sales data from Fleet Audits, and for LPG vehicles, a reduced MPG figure to account for the lower energy density of LPG compared to petrol.

The advisory electric rate for fully electric cars is calculated using a combination of data from the Department for Energy Security and Net Zero, the Office for National Statistics (ONS), car electrical consumption rates from the Department for Transport (DfT), and annual car sales volumes to businesses.

To ensure the rates accurately reflect the changing costs of electricity, the 'pence per kilowatt hour' cost published by the Department for Energy Security and Net Zero is updated quarterly with the ONS' Consumer Prices Index for electricity.

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COMTEX_468325491/2227/2025-08-26T17:59:22


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