AUTHOR: RALPH MORTON
Have you been lured by the low running costs of an electric car? No more filling up at the fuel station – just plug in and top up at the mains.
But if you have, what are the correct business mileage rates for electric cars (AMAP rates)?
(AMAP rates are currently 45p per mile for the first 10,000 miles to reimburse drivers for using their private car on business – they are attractive because they are tax free.)
Or if you have chosen an electric car as your company car, what business mileage rate should you be claiming?
ACFO, the UK’s leading fleet-decision-makers’ organisation, is currently sitting down with HM Revenue and Customs to thrash out what is the correct business mileage allowance for employees driving electric cars following that launch of an increasing number of electric cars, such as the Nissan Leaf and Renault Twizzy.
ACFO says HMRC has yet to officially clarify both Advisory Fuel Rates (for company cars) and Approved Mileage Allowance Payments (for private cars used on business).
Advisory Fuel Rates apply where employers reimburse employees for business travel in their company cars or require employees to repay the cost of fuel for private travel. Set quarterly, the pence per mile figure is linked to the engine size of the car with different rates applicable for petrol, diesel and LPG models.
Approved Mileage Allowance Payments are paid to employees who drive their own cars on business. In 2012/13 the tax-free pence per mile figure is 45p for the first 10,000 business miles and 25p for each subsequent mile.
ACFO chairman Julie Jenner commented at the recent ACFO conference hosted at Mercedes-Benz World by Nick Andrews, head of fleet at Mercedes: “HM Revenue and Customs originally indicated that the AMAP rate would apply. However, that figure bears no reality to either the cost of the fuel or the whole life cost of the vehicle. The tax office must also take into account where vehicles are recharged – at the drivers’ home or place of work.”
Julie added that the company car issue needed further clarification : “ACFO has a close relationship with HM Revenue and Customs and dialogue is continuing with officials over what the reimbursement rates for electric cars should be. Tax officials are undertaking financial modelling to ascertain what a fair pence per mile rate is in respect of both Advisory Fuel Rates and Approved Mileage Allowance Payments.”