Starting 1 September 2025, two separate advisory fuel rates apply to fully electric cars depending on whether charging is at home or using a public charger.
HMRC’s advisory fuel rates can be used to reimburse employees for business travel in their company cars, or where employees are required to repay the cost of fuel used for private travel.

Rates
The electric car rate was previously 7p per mile, regardless of where charging took place. Reimbursement at this rate meant company car drivers could be faced with a substantial shortfall if they made extensive use of public charging networks.

Advisory rates are now 8p for home charging, with 12p for public charging. Although the previous single rate can continue to be used until 30 September, from 1 October only the new rates can be applied. This means:

• The change to two separate rates reflects the higher cost of using public charging locations.
• However, the public charging rate is based on the typical cost of a slow or fast charge. It will, therefore, normally be less than what a driver would pay to use an ultra-fast charger.
• If this is the case, reimbursement can reflect the higher, actual, cost provided the rate can be substantiated.

 
As long as business mileage is reimbursed at an acceptable rate – the advisory rate or a substantiated higher rate – employees will not face a taxable fuel benefit, and there are no national insurance contribution implications for either the employer or employees.
 
In addition, having rates for different charging locations means more complicated record-keeping requirements for employers.

Hybrids
The change only impacts on fully electric cars. Hybrids are treated as either petrol or diesel cars, so the advisory rates for these types are relevant. There are no changes to the petrol rate from 1 September, but two of the diesel rates have increased by 1p per mile.
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HMRC guidance on its advisory fuel rates can be found here.

Recently published statistics show that the company car is making something of a comeback, with the number of recipients for 2023/24 up 80,000 from the previous year.
From a high of 960,000 company car recipients in 2015/16, the number dropped to 720,000 by 2020/21. The level has now picked up to 840,000, with the increase due to the beneficial tax treatment of cars with CO2 emissions of 75 grams per kilometre or less, especially fully electric cars.

Salary sacrifice
With tax thresholds frozen, sacrificing salary in return for the use of a low-emission company car can mean a significant tax saving. For example, an employee with an income of £120,000 – well within the personal allowance trap – who sacrifices £6,000 of salary to cover the employer’s lease cost of a mid-priced, fully electric company car, will save around £2,800 in tax and National Insurance Contributions. With this in mind:

• It is therefore not surprising that the number of zero-emission company car recipients has risen six-fold between 2020/21 and 2023/24, with the number now standing at over 340,000. This is 41% of all company car benefit recipients.
• It also explains why the average CO2 emission of company cars for 2023/24 was 56 g/km, compared to 71 g/km in the previous tax year.
• A further advantage of an employee making use of a fully electric company car is that there will be no fuel benefit even if a charging point is provided at the employer’s premises.

 
The rise in fully electric company car recipients is mirrored in the percentage of company car drivers with diesel cars, which is down to 13%, having been nearly 50% back in 2020/21.
 
The future                            
While fully electric company cars currently attract a benefit percentage of just 3%, this percentage is set to increase to a much less beneficial 9% by 2029/30. For the taxpayer in our example, this will cut the overall tax saving to around £1,000. The company car comeback may be short-lived after all.
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The tax cost of having a company car can be calculated starting here using HMRC’s company car and car fuel benefit calculator.

HMRC has scrapped plans for Making Tax Digital (MTD) to include corporation tax. However, new digital services will be rolled out over 2025/26, as outlined in its recently published transformation roadmap.

MTD for corporation tax
HMRC had not confirmed a date for introducing MTD for corporation tax, which has now been officially abandoned; the introduction of MTD for income tax from April 2026 also pushed the corporation tax element further down the priority list.
That leaves the question of how HMRC will modernise corporation tax administration in other ways, especially as the tax gap for corporation tax is now estimated at nearly 16%.

Digital services
The transformation roadmap sets out more than 50 information technology projects, services and measures, including:

• A new online service for Pay As You Earn taxpayers, which will make it simpler and easier for employees to check and update their income, allowances and reliefs. The new service will be available through an employee’s personal tax account or through the HMRC app.
• The launch of a new expenses service, which will enable employees to submit claims for tax relief on their allowable expenses and to upload the supporting evidence all in one place.
• The expansion of digital services for the self-employed, which will improve the registration service and also streamline the exit process for those who no longer need to file a self-assessment tax return.

 
A biometric voice system is already being used to verify taxpayers’ identities when contacting HMRC, and this system will be expanded throughout the remainder of 2025/26.
 
HMRC’s long-term aim is to end reliance on phone lines, which will come as no surprise given the long wait times and number of calls going unanswered. By 2030, HMRC intends for 90% of taxpayer interaction to be digital, either through personal tax accounts or using the HMRC app.

HMRC’s transformation roadmap can be found here.

Shortly before Parliament closed for its summer holidays, the government announced a review of the State pension age (SPA).
Pensioners are a sensitive topic for the government. Not only has it been forced to make a U-turn on winter fuel payments, but it has also had to stand firm against the Women Against State Pension Inequality who were affected by the increases in the SPA in the 2010s. So it likely did not relish the requirement inherited from the previous government to undertake a fresh review of the SPA within two years of being elected.

In mid-July, as part of a bring-out-your-dead pile of announcements made just before the summer recess, the Department for Work and Pensions (DWP) revealed two fresh SPA reviews. As was probably hoped, the news was swamped by other government statements, such as the relaunch of the Pensions Commission, which appeared on the same day. Nevertheless, the SPA review will have significant impacts, both for individual and government finances.

The current situation is:

• SPA is 66 for men and women.
• It will gradually rise to 67 over two years from next April.
• Currently, the SPA increase to 68 is legislated to be phased in over two years from April 2044.
• The first review, published in 2017, proposed that the SPA should rise to age 68 from 2037–39.
• A second review (in 2022) proposed 2041–43 for the move to 68.
• Both reviews prompted the government to promise another review before the final decision is made.
• At least ten years’ notice will be given of any change to SPA.

 
The original 2037–39 proposal now looks unlikely to go ahead, not least because it would be hard to meet the ten-year notice requirement. However, there is another reason for delaying further change. Since 2037 was proposed, projections for UK life expectancy have fallen significantly. At the time of the first report, a man aged 68 in 2037 was projected to live 21.1 years and a woman, 23.0 years. The latest figures are 18.4 years and 20.9 years respectively, which would point to abandoning any increase to SPA. Government finances inevitably pull in the oppositedirection, as the annual savings run to billions. 

Arguably the DWP has won its last two battles with the Treasury (over winter fuel and disability benefits). SPA is unlikely to be a third victory.
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You can check your projected SPA on the you.gov site here and State pension forecast here.