VAT advisory fuel rates for electric vehicles

HMRC has introduced, effective from 1 September 2025, a new VAT Advisory fuel rate for public charging of electric vehicles. The rate is set at 14 pence per mile, with the VAT element being 1/6th of this amount, equating to 2.33 pence per mile.

VAT recovery is only possible for businesses (excluding sole proprietors) for public electric charging. Charging at the employer’s premises is classified as public charging. No VAT recovery is possible when an employee charges the car at home, as HMRC determines that the supply of electricity is made to the employee, not the business.

For Advisory Fuel purposes, a hybrid vehicle is treated as either a petrol or diesel vehicle.

The normal VAT recovery rules for employee mileage claims apply to electric charging. Therefore, a receipt for public charging dated within the period of the employee's expenses claim, along with details of the mileage on the expenses claim, is required.

If you wish to discuss this in further details, please get in touch with one of our Indirect Tax Services experts here.