# Advisory Electric Rate Q2 2026: the UK update fleets must apply

> HMRC publishes the Advisory Electric Rate every quarter. Here's how to apply the Q2 2026 change without reopening payroll.

**Author:** James Mitchell — UK Tax Specialist (HMRC)  
**Published:** 2026-05-01  
**Updated:** 2026-05-01  
**URL:** https://quilometragem.com/blog/advisory-electric-rate-q2-2026-the-uk-update-fleets-must-apply

**TL;DR:** HMRC's Advisory Electric Rate changed on 1 June 2026 — apply immediately with back-pay or switch on the next quarterly payroll.

- AER ≠ AMAP (personal cars)
- Quarterly cadence since Dec 2024
- Higher bespoke rate allowed with evidence
- Automate the rates table to make future changes routine

## What the AER actually is

The Advisory Electric Rate (AER) is HMRC's published per-mile figure for reimbursing employees who drive a *company-provided* electric car on business. It is the EV equivalent of the Advisory Fuel Rates (AFR) used for petrol and diesel company cars. The AER is *not* the same as the AMAP rate — AMAP applies when an employee uses their *own* car for work; AER applies when the employer owns or leases the car and the employee pays for the electricity.

From 1 December 2024 the AER moved to a quarterly review cadence aligned with the AFR (1 March, 1 June, 1 September, 1 December), which means a fleet operator gets four mandatory price-update windows a year for EV drivers.

## What changed in Q2 2026

For 1 June 2026, HMRC raised the AER to reflect rising domestic and rapid-charging electricity prices over Q1. Operators using the previous figure between 1 June and the date payroll catches up have two options under HMRC guidance:

1. Apply the new rate from 1 June and back-pay the difference for the partial period.
2. Continue paying the previous rate for two months (HMRC's standard transition window) and switch on the next quarter boundary.

Option 2 is the lighter-touch route for SMEs without a payroll team running real-time gross-to-net adjustments.

## When the AER is wrong for your fleet

The AER is an average. If your drivers exclusively rapid-charge on motorways at premium tariffs, the actual cost per mile can be 50-80% higher than the AER. HMRC permits employers to use a *higher bespoke rate* provided they can show evidence of the actual electricity cost — typically a sample of charging session receipts and the manufacturer's published efficiency figure.

The inverse also holds: if your drivers charge almost exclusively at home on cheap overnight tariffs, the AER may overpay the cost. Underpaying is fine; overpaying without evidence creates a benefit-in-kind exposure (the difference becomes taxable pay).

## Operational checklist for the change

1. Update the AER table in the reimbursement system on or before 1 June. Most teams centralize this in a single rates file and let the calculator pick up the new value automatically.
2. Send the 'AER changed' notice to drivers and managers; include the new pence-per-mile and the effective date.
3. Confirm the payroll cycle that crosses the boundary handles two rates correctly. Most payroll engines do; spreadsheet-based ones often do not.
4. Archive the old rate in the rates table with its effective date range — auditors care about historical accuracy as much as the current value.
5. Schedule the next review date (1 September) on the finance calendar.

## What to tell drivers

Keep the message short and concrete: 'From 1 June 2026, the per-mile rate for company EVs increases to Xp/mile. Your existing trip log entries continue to use the old rate; trips on or after 1 June use the new rate. No action required.'

Do not promise drivers a rate review every quarter — HMRC may leave the AER unchanged. The promise is that your fleet will track HMRC's published figure within one pay cycle of any change.

## Bottom line

The AER is a low-effort, high-trust mechanism for EV fleet reimbursement when the rates table is automated and payroll handles split-period rates. The Q2 2026 change is small in absolute pence terms but is the first one your business operates after the cadence-alignment with AFR — getting the process right this quarter de-risks every future change.

## Frequently asked questions

### Does the AER apply to personal EVs used for work?

No. Personal EVs use AMAP (45p/25p). The AER applies only to company-owned EVs where the employee pays for charging.

### Can I pay above the AER?

Yes, with evidence of actual electricity cost (charge-session receipts + vehicle efficiency). Without evidence, the excess becomes a taxable benefit.

### How often does the AER change?

Quarterly since December 2024 — 1 March, 1 June, 1 September, 1 December. It can stay flat when electricity prices don't move.

## Sources

- [HMRC — Advisory fuel rates (including the Advisory Electric Rate)](https://www.gov.uk/guidance/advisory-fuel-rates) — HMRC (2026-05-01)
- [HMRC — Tax on company benefits: company cars](https://www.gov.uk/tax-company-benefits) — HMRC (2026-05-01)