Electric vehicles are no longer a niche choice for fleets. They are a growing part of the UK business decarbonisation landscape, driven by net zero targets, government incentives, and the long-term savings EVs can deliver. Yet, our experience with businesses across the UK tells us that a standout challenge remains at the centre of adoption for many companies: how to fairly reimburse employees for home EV charging expenses.
This is known as EV home charging reimbursement. It's a relatively simple concept, but the rules, rates, and practicalities prove to be much more complex than traditional fuel expense management.
This guide explains what businesses need to know, what HMRC says, and how to set up a fair, reliable reimbursement system.
This guide was last updated in September 2025.
Why EV home charging reimbursement matters
For petrol and diesel vehicles, fuel cards make cost management straightforward. For EVs, the charging network is more fragmented. Drivers may top up at home, at public charging stations, or at charge at work.
Home charging is often the cheapest and most convenient option, but without a clear home EV charging reimbursement process, businesses risk:
Overpaying or underpaying employees.
Creating confusion around expense claims.
Reducing employee trust and adoption of EVs.
Failing to comply with HMRC guidance.
A clear EV home charging reimbursement policy supports both the business and the driver, giving confidence that costs are covered fairly.
What HMRC says about reimbursing EV charging
HMRC provides an Advisory Electricity Rate (AER) for reimbursing employees who use company cars.
But here’s the issue: electricity prices vary widely.
Many drivers pay more than this per kWh at home, so 9p per mile often underestimates the real cost. According to Ofgem data, the average domestic unit rate for electricity in 2024 is around 27p per kWh, but some tariffs are higher. This makes the AER a blunt tool.
Some businesses simply stick to the AER for simplicity. Others use actual cost-based methods to more accurately reimburse drivers (typically via receipt submission as part of their expenses policy).
As of September 2025, HMRC introduced an update to mileage reimbursement rates for electric vehicles (EVs).
The Advisory Electric Rate (AER) now distinguishes between home charging and public charging, reflecting the real-world differences in cost for business drivers:
Home charging: 8p per mile (previously 7p).
Public charging: 14p per mile (previously 7p).
Originally, HMRC set the public rate at 12p per mile, but revised it to 14p following industry feedback that their calculations underestimated the actual cost of EV charging across the public network.
Home charging is based on an average domestic electricity price of 27.04p/kWh and an efficiency of 3.59 miles per kWh.
Public charging also uses an efficiency assumption of 3.59 miles per kWh but assumes a cost of 51p/kWh, taken from Zapmap’s national charging price index for slow and fast chargers under 50kW.
Real-world ultra-rapid charging costs
HMRC’s new mileage rate for electric vehicles fails to recognise the price of ultra-rapid charging, which is often the default choice for business drivers and corporate fleets.
The real-world cost of ultra-rapid charging is around 80p/kWh, or more.
This gap between HMRC’s allowance and the real cost of ultra-rapid charging highlights a challenge for reimbursement policies, but also shows the importance of home charging and EV home charging reimbursement as critical for fleets.
Home charging electric vehicles (EVs) remains, by far, the cheapest option for fleet operators, businesses and drivers.
The higher cost of ultra-fast charging could mean that drivers intentionally detour to slower, cheaper charge points to avoid being out of pocket, adding to additional mileage and wasted time - directly impacting business productivity.
Methods of EV home charging reimbursement
There are three main ways UK businesses approach reimbursement:
1. Using HMRC’s Advisory Electricity Rate (AER)
Sticking to the government's Advisory Electricity Rates (AER) is the most conservative approach, which entails applying the standard HMRC AER regardless of the actual charging costs paid by the driver:
Pays employees 8p per mile for business journeys in a company car.
Simple and HMRC-approved.
Easy to administer but often undervalues the true cost of electricity.
Often unfair, as it can leave your drivers out of pocket.
Pros of the AER: simple administration, tax-efficient, and no additional costs.
Cons of the AER: leaves employees out of pocket, damages morale, and slows EV adoption.
2. Receipt-based: actual cost reimbursement
Some businesses recognise the shortfall in the HMRC AER and instead choose to reimburse colleagues for their actual charging spend, using receipt submissions. Of course, this is much fairer - ensuring that colleagues are paid back for their actual expenses, but it creates a significant administration burden as this would be managed through your typical expenses platform.
Your teams have to verify receipts, distinguish between business and personal charging, and navigate potential tax implications if the reimbursement exceeds HMRC rates. At scale, this becomes unmanageable and may create taxable benefits that require P11D reporting:
Based on the driver’s actual home electricity tariff.
Requires evidence such as bills or smart meter data.
More accurate but can be harder to administer, especially if tariffs vary across employees.
Pros of actual cost reimbursement: fairer to employees, and covers real expenses
Cons of actual cost reimbursement: a greater administrative burden, potential tax implications (benefit in kind), and more difficult to manage at scale
3. The best approach: EV charging technology solutions
Specialist EV charging payment management platforms, such as our Rightcharge EV charging solution, integrate with vehicles, home chargers and energy suppliers to calculate the precise cost of business charging. This removes the guesswork and the additional admin. It also gives businesses auditable records if HMRC ever questions reimbursement.
At Right Fuel Card, our Rightcharge EV charging solution gives your business the power to effortlessly and accurately track and reimburse business mileage directly to your drivers’ energy provider - there’s no need to track receipts and expenses. This then results in fair cost reimbursement, so nobody is out of pocket.
Alongside this, the Rightcharge EV charge card unlocks the UK’s largest network of public EV chargers - so your fleet has the flexibility it needs to charge wherever drivers need to.
What’s more, as Rightcharge is offered by Right Fuel Card, it’s the ideal solution for fleets transitioning to EV but still operating traditional internal combustion engine (ICE) vehicles. With Right Fuel Card, all fuel spend and EV charging costs (both public and home charging) are consolidated into a single, HMRC-approved invoice that’s paid automatically via Direct Debit.
Challenges businesses face with EV home charging reimbursement
When setting up EV home charging reimbursement, companies often encounter:
Tariff variation: Employees may be on fixed, variable, or time-of-use tariffs. Rates can change during the day, especially the very popular EV charging rates that offer much cheaper kWh rates through the night.
Shared households: Electricity bills may cover more than the driver’s car. Splitting costs fairly can be complex without a reliable technology solution that integrates vehicles, chargers and tariffs - such as Rightcharge.
Admin burden: Collecting receipts, checking mileage, and reimbursing monthly can become time-consuming at scale.
Policy clarity: Without clear rules, employees may feel underpaid or be unsure what evidence to provide.
However, Rightcharge addresses these challenges head-on, connecting directly with vehicles, chargers and energy providers. We know the tariff, costs, vehicles and mileage, so we can ensure fair and accurate driver reimbursement without the additional hassle of collecting receipts and expenses, and chasing drivers.
Colleagues and EV home charging reimbursement
This guide has talked a lot about fairness and accuracy, and that’s because when EV home charging reimbursement schemes fail to be fair, you have colleagues effectively out of pocket, subsidising their own business travel.
Put simply, an employer needs an employee to travel to do their job, but they’re not wholly reimbursing them for this.
This is simply not fair.
Depending on their role, this could add up to a difference of hundreds of pounds a year, the consequences of which extend well beyond anger and frustration with expenses. For colleagues in field-based roles, this poses additional financial pressure, which, in turn, can lead to genuine stress and resentment.
What’s more, without accurate and fair reimbursement, this isn’t an incentive to switch to EV; it’s the exact opposite.
Colleagues may feel at odds, even penalised, for opting for an EV as the most sustainable option - both personally, and for the business.
The issue / challenge here is not with electric vehicles, it’s the choice of how businesses choose to reimburse colleagues and the government advice guiding that decision. Failing to implement a fair and consistent EV charging reimbursement policy leaves colleagues out of pocket and feeling undervalued and frustrated.
Contrastingly, organisations that implement home EV charging reimbursement effectively strengthen trust, showcase a real alignment between their long-term decarbonisation and sustainability goals and their colleague experience.
Ensuring that colleagues are supported in their switch to EVs turns electrification into a benefit, rather than a point of potential friction.
Best practices for EV home charging reimbursement
To keep your EV home charging reimbursement simple and fair:
Decide on a consistent method. Will you use the Advisory Electricity Rate (AER), the actual cost, or a solution like Right Fuel Card’s Rightcharge to take away the hassle of manual work? This is a decision to make based on the needs of your business and alignment with other policies.
Communicate the policy. Make sure drivers know how reimbursement is calculated and what evidence is required when they are claiming back EV charging expenses.
Review regularly. Electricity prices are volatile, so review your EV reimbursement rates at least quarterly and especially following HMRC and government policy changes to ensure you’re up to date with the latest recommendations and that drivers aren’t left out of pocket.
Use technology. Where possible, adopt solutions that track kWh usage directly from the charger. Even better, Rightcharge integrates across the individual vehicle, the EV charger and the home energy provider to ensure complete accuracy for all business mileage reimbursed. Rightcharge can even distinguish between more than one electric vehicle using the same EV charger at the same house.
Integrate with wider fleet policy. Ensure your EV reimbursement rules align with your existing fuel card or expense policies to maintain consistency and fairness.
How EV home charging reimbursement affects fleet costs
For businesses managing large fleets, getting EV reimbursement right is not just about fairness; it is about control.
Underestimating the cost could discourage EV take-up among drivers, particularly if they’re left out of pocket for business travel. Overestimating the cost requirements could inflate fleet budgets and leave the policy open to bad actors taking advantage.
For example, if a driver travels 1,000 business miles a month in a company EV:
At the HMRC rate of 8p per mile, reimbursement = £80.
At an actual cost of 12p per mile, reimbursement = £120.
Across 50 drivers, that difference could equal £1,500 per month.
This shows why accuracy and fairness matter - why risk overpaying or underpaying when you can opt for a solution that’s integrated, accurate and hassle-free?
As is clear, this impact is really felt at scale. The larger your fleet, the greater the risk of either over- or underpaying colleagues.
EV home charging and your business's sustainability goals
The UK government has committed to banning the sale of new petrol and diesel vehicles. This, coupled with your organisation's net-zero decarbonisation goals, means that alternative fuel vehicles are a future reality most are planning for now. For most businesses reading this, electric vehicles are the solution.
As we’ve already covered, if your business has committed to transitioning the fleet to EVs, a shortfall in EV charging reimbursement can deter colleagues from making the change.
When colleagues are left out of pocket for the cost of public charging, EVs lose their appeal, and many may opt for petrol or diesel alternatives instead, which slows EV adoption and undermines progress against your ‘Scope 3’ emissions reduction targets, where business travel is often one of the largest contributors.
Corporate businesses and large fleets will feel the effects of even a modest slowing of EV adoption, and the impact of this could mean thousands or even tens of thousands of additional tonnes of CO₂ each year added to your reporting, and a disconnect between sustainability and investor commitments and the colleague experience of those working within the organisation. All of this can severely damage your business's reputation, damaging investor relations, customer acquisition and retention and colleague acquisition and retention.
The role of fuel cards and EV charge cards in the EV transition
Right Fuel Card has always helped businesses manage fuel costs. We know that the majority of EV drivers rely on home charging and, as fleets transition to EVs, we are developing solutions that give the same simplicity customers expect for fuel, for electricity reimbursement, such as Rightcharge. Just as fuel cards track and report spend at petrol stations, integrated EV tools help manage charging costs at home, on the road, and at work.
Our goal is to make EV home charging reimbursement as simple as paying for petrol or diesel today.
Next steps for businesses
If your business is introducing EVs or already has them in the fleet, now is the time to:
Review your reimbursement approach.
Decide whether AER, actual costs, or a tech solution is best for you.
Update your fleet policy and communicate it clearly to drivers.
Speak with providers like Right Fuel Card about integrated solutions.
Final thoughts
EV adoption is accelerating. Fleet managers who plan now for fair and accurate EV home charging reimbursement will have fewer headaches in the future and, more than likely, a quicker and greater uptake of EVs in their fleet.
A clear, transparent system reduces disputes, builds driver trust, and keeps fleet budgets accurate.
Right Fuel Card is here to support your business through the EV transition. Learn how we can help streamline your EV charging reimbursement and keep your fleet moving with confidence.
