HMRC are introducing an advisory fuel rate (AFR) of 4p per mile from 1st September for 100% electric cars. We hope that with a defined AFR electric cars will be more straightforward to implement within company car fleets.
The Association of Car Fleet Operators (ACFO) has been lobbying to introduce AFRs for both electric cars and plug-in hybrids (PHEVs) for some time.
PHEVs will continue to be classed as either petrol or diesel models for mileage reimbursement.
AFRs apply where employers reimburse employees for business travel in their company cars, or require employees to repay the cost of fuel used for private travel. They are deemed to be tax and National Insurance-free.
These rates are reviewed every quarter and increase or reduce in line with prevailing fuel prices at the pumps. Similarly, HMRC says it will keep the new Advisory Electricity Rate under review.
For more information: www.gov.uk/government/publications/advisory-fuel-rates