Nissan LEAF 2018 charging
Business mileage rates for electric cars: confirmed by HMRC for use from September 01, 2018
Share this article
  •  
  •  
  •  
  •  
  •  
  •  

AFTER years of pressure from the fleet decision makers’ organisation ACFO, HMRC is finally publishing electric car business mileage rates.

From September 01, 2018, the official HMRC rate is 4p per mile.

This is the Advisory Fuel Rate for electric cars. Or, to use the correct HMRC term, Advisory Electricity Rate (AER). All current company car mileage rates can be found here: New company car business mileage rates.

HMRC advises that as long as the appropriate AER charge of 4p per mile is used for reimbursing staff for electricity in their fully electric car, there will be no taxable profit and no Class 1 National Insurance to pay.

However, unlike petrol or diesel company cars, HMRC says that electricity is not a fuel for car fuel benefit purposes.

Currently the Advisory Fuel Rates are used to reimburse business mileage without incurring benefit-in-kind taxation for petrol or diesel cars.

For drivers of hybrids HMRC says you should use the appropriate petrol or diesel rates depending on the fuel used by the engine.

Now reader Chris Sullivan can claim for his Nissan Leaf company car

The AER rates for electric cars will be welcome news to Business Motoring reader Chris Sullivan.

Business woman charging up an electric car
Use your private electric car for business and claim 45ppm

He contacted us to say he personally paid for the electricity that powers his Nissan Leaf company car – at 5p per mile or £400 per year – and couldn’t find an electric business car mileage rate to claim back his expenditure.

Now he can use the electric car company car business mileage rates to do so.

Had Chris bought his Nissan Leaf privately, then he would have been able to claim his business mileage rates via the AMAP rates, which would be 45p per mile tax free for the first 10,000 miles of business mileage, and 25p per mile thereafter – see the comments section of our story Tax: Business mileage rates for using a private car (AMAP)s.


Share this article
  •  
  •  
  •  
  •  
  •  
  •  

1 COMMENT

  1. I don’t see any reason why you could not use an average PPM rate. This is allowable today where you divide the fuel spend for the period by the miles driven in that period, resulting in a PPM for all mileage. Once you have the PPM for all mileage then multiply that by the personal mileage.

    Same goes here I would think.

    If Chris spent £400 on electricity charging his car and then drove 400 miles (example only) then it works out at £1 per mile. If business mileage is 50% (200 miles) then claim back £200 from your employer. Seems like it should work

    HMRC would have to be pretty stingy to challenge this, so long as you have accurate mileage records and can show the cost of charging your car. It is a legitimate expenses after all.

    I do however agree that HMRC does need to address the ambiguity. If I were a company car driver considering an EV it would make me think twice. We need to reduce barriers for EV adoption wherever possible.

LEAVE A REPLY

Please enter your comment!
Please enter your name here