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How the Advisory Electricity Rate Works
The AER is a mileage based reimbursement rate set by HMRC. It is reviewed quarterly. Drivers multiply their business miles by the approved rate and submit the claim. At 7p per mile, a driver covering 1,000 business miles per month would claim £70.
The rate assumes an average efficiency of 3.59 miles per kWh and a home electricity cost of around 25.72p per kWh. HMRC also publishes a separate rate for public charging, 15p per mile since 1 June 2026, reflecting higher costs at public chargepoints. Both rates move at the quarterly reviews, so check the current figure each quarter.
Reimbursements at the AER are tax free for employees and are not treated as a benefit in kind. Payments above the AER rate may be taxable as earnings.
Tracking Home Charging Sessions
The challenge with home charging is proving how much energy went into the company vehicle versus the household. Smart home chargers like Zappi or Ohme can log individual sessions and report energy usage per vehicle. This data integrates with fleet management software to create clear audit trails.
Our platform tracks every charging session at driver home locations. Reports show exactly how much energy was used, when and what it cost. Drivers submit claims directly from the app. Finance teams receive clear documentation for tax compliance.
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Best Practice for Managing Home Charging Claims
Verify business mileage through telematics or driver logs before applying the AER rate. Differentiate between home and public charging claims since the rates are different. Update your reimbursement policy quarterly when HMRC reviews the AER.
Some fleet operators install company owned chargers at driver homes. The charger tracks all usage automatically and billing flows through the fleet account. This removes the expense claim process entirely and gives fleet managers complete visibility of charging costs across all locations.
