Fleet News

TMC mileage rate advice for EVs and PHEVs updated

plug-in car grant, electric vehicles.

TMC has updated its guide to reimbursing drivers of company-run or grey fleet electric and plug-in hybrid cars.

Its advice on reimbursing drivers of wholly-electric vehicles includes the new Advisory Electric Rate (AER) for EVs, of 4 pence per mile, announced by HMRC in August.

TMC expects the guide to be of particular interest to fleets running plug-in hybrid cars (PHEVs), after its real-world mpg data revealed that many PHEVs actually cost more in fuel pence-per-mile than typical diesel or petrol company cars due to drivers not charging them.

Paul Hollick, managing director of TMC, said: “While the Advisory Electric Rate (AER) for electric vehicles satisfied calls for a simple reimbursement rate for company car and cash allowance drivers of pure EVs, the extreme variability of PHEVs’ fuel consumption sets them apart from both electric and combustion vehicles.

“Employers have the option of applying the appropriate AFR rates for petrol or diesel to PHEVs. But with PHEVs’ fuel use varying by up to 300 mpg depending on the drivers’ journeys and charging practice, reimbursing for PHEV fuel at a flat rate will rarely be realistic or fair.

”There are alternatives to advisory fuel and electric rates, of course. With every type of drivetrain there is the option to reimburse fuel at actual cost (calculated from mileage and fuel purchase data). Or employers can set their own fuel rates, provided they are no higher than the relevant AFR, or can be substantiated if they are.

“In the meantime, the key point for businesses to keep in mind is that PHEVs offer a valuable bridge between combustion and fully-electric vehicles.

“Used correctly, PHEVs can deliver significant real-word operating cost savings. Our guide describes how to capture those savings by paying rates that fairly reflect PHEVs’ real-world cost-per-mile potential, using methods that fully comply with the rules on fuel reimbursement.”

TMC’s guide also contains advice on settling claims for business mileage incurred by private plug-in owners, describing how fleets can calculate the correct adjustments to AMAPs.  it also covers deductions for private use for fuel card users.

The guide is available by clicking here.

Click here for electric cars and hybrids best practice and procurement insight

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