Company car drivers for National Grid have been paid twice the recommended reimbursement rate for business mileage, as a response to the increased cost of charging their vehicle.
The advisory electricity rate (AER) recommended by the Government is 5p per mile, but employees for National Grid have received 12 per per mile. The payments have been backdated to April of this year, when the electricity energy price cap rose by 54%.
The reimbursement rate, which has been set in conjunction with the RAC Charge Watch average price check, will be subject to regular review.
Lorna McAtear, National Grid fleet manager, said the changes were being introduced on a temporary basis. “We don’t yet know what the longterm solution is, but we knew our drivers were out of pocket. The changes reflect there is a gap between what’s advised (by HMRC) and what’s happening in reality,” said McAtear.
National Grid also has 400 internal combustion engine (ICE) drivers, and has increased petrol and diesel reimbursement rates to better reflect pump prices. The company hopes that HMRC will make changes to the AER to better reflect the current costs of driving.
The Association of Fleet Professionals (AFP) and the British Vehicle Rental and Leasing Association (BVRLA) have been lobbying for an overhaul of the way the mileage rate is calculated and for it to be increased.
Industry experts are predicting wholesale electricity prices will more than double this winter, raising the Standard Variable Tariff set by Ofgem to around 60p/kWh, up from the current 28p/kWh following April’s energy price cap increase.