A new AER reimbursement tool is helping tackle one of the biggest challenges facing electric vehicle fleets: accurately applying the UK’s two-tier mileage reimbursement system.
Since its launch just a few weeks ago, more than 5,000 users have already engaged with the Fleet News AER Reimbursement tool and EV journey cost calculator, underlining the growing demand for practical solutions as fleet electrification accelerates.
The tool enables company car drivers to calculate the real-world cost of individual journeys while applying the correct reimbursement under HMRC’s two-tier Advisory Electric Rate (AER). This currently stands at 7ppm for home charging and 15ppm for public charging, reflecting the significant cost gap between the two.
This split-rate system was introduced in September 2025 to replace the previous flat rate, which many in the industry felt no longer reflected reality. Public charging can be substantially more expensive than charging at home, and the old system often left drivers out of pocket when travelling for business.
As a result, the new structure aims to deliver fairer reimbursement — but it has also introduced complexity.
Matt Waller, general manager of The Charge Scheme, part of The Electric Car Scheme, said the tool addresses a clear and growing issue. The widening gap between home and public charging costs means a single reimbursement rate is no longer viable, and tools that reflect actual charging behaviour are essential for both drivers and employers.
While the Fleet News tool has not yet been formally endorsed by HMRC, it aligns closely with official guidance published in late 2025. That guidance allows employers to calculate reimbursement using a “fair and reasonable” apportionment of mileage based on where charging takes place.
In practical terms, this means fleets can split a journey between home and public charging by estimating how much energy was used from each source. HMRC has also confirmed that journey length can be used as a proxy where detailed charging data is unavailable — a crucial point for fleets lacking advanced telematics or charging records.
However, this is where many organisations encounter difficulties.
The two-tier AER system requires businesses to track charging behaviour, gather supporting evidence, and ensure claims are auditable. This can include receipts, charging logs, or vehicle data — adding administrative burden and increasing the risk of inconsistency if processes are not standardised.
This is the gap tools like the Fleet News AER calculator aim to fill — simplifying complex calculations and helping ensure compliance with HMRC expectations, while reducing manual workload for fleet managers.
Alongside this, the EV Journey Cost Calculator is also gaining traction among drivers seeking greater transparency over their running costs. Using real-world data rather than manufacturer WLTP figures, it provides a more accurate estimate of journey expenses, including total charging cost, cost per mile, energy consumption and range usage.
This reflects a broader shift in the fleet sector, where businesses are increasingly focused not just on electrification, but on cost control, policy accuracy and driver fairness.
Fleet News editor Stephen Briers said the organisation recognises its role in helping fleets navigate these challenges. With reimbursement now dependent on charging behaviour rather than a simple flat rate, tools that provide clarity and consistency are becoming essential.
Looking ahead, the importance of accurate AER calculation is only set to grow. HMRC reviews advisory rates regularly to reflect changes in energy prices and vehicle efficiency, meaning reimbursement levels — particularly for public charging — are likely to continue evolving.
At the same time, as more businesses transition to electric fleets, the need for robust, data-driven reimbursement processes will increase. Without them, organisations risk underpaying drivers, overpaying claims, or falling out of line with tax guidance.
In that context, tools that can bridge the gap between policy and real-world usage are not just helpful — they are becoming a critical part of effective EV fleet management.
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