Drivers of electric vehicles will continue to be reimbursed at the Approved Mileage Allowance Payment (AMAP) rate of 45 pence per mile (ppm). HM Revenue and Customs (HMRC) set a ppm rate at which employees driving their own vehicle can be paid without having to pay tax; the aim is to reimburse employees for fuel usage, alongside other costs like servicing, maintenance and repair.
Grey fleet drivers are able to be paid up to 45ppm tax-free for the first 10,000 miles in the tax year and 25ppm thereafter. As electric vehicle (EV) drivers do not pay pump prices to fill up their vehicles, some believe the Government should review AMAP rates before more people take up the technology. However, HMRC believes that the rates should remain the same because EV drivers have to pay a premium for their vehicle, above the price of a conventional car. 'Depreciation, for example, may form a much higher proportion of an electric car's costs per mile.'
Three-quarters of respondents to a Fleet News poll disagree with HMRC, with one respondent saying that the rate should provide an incentive for electric drivers: 'They should be given a higher rate as an incentive to embrace the technology.' Despite the Government's Plug-in Car Grant, which provides new drivers with a £5,000 subsidy off the price of a new ultra-low carbon vehicle, electric car sales remain low, with the majority being business to business rather than private deals. However, sales are beginning to accelerate, although at low unit volumes.
The Society of Motor Manufacturers and Traders (SMMT) revealed that electric sales were up 70 per cent in June on the same period in 2012 and 11 times higher than the volume shifted over the whole of 2010. Some councils are beginning to introduce electric vehicles into their fleets, notably Gateshead Council, whose fleet is managed by Graham Telfer: 'The number of privately registered EVs is very low at the moment, but it's something we would explore when it becomes more apparent,î he said. The Government maintains that it will keep the rates under future review: 'Minsters are satisfied that they currently provide a fair remuneration for drivers using their own cars for business mileage' said the HMRC spokesman.
