The fleet representative body ACFO recently launched a petition, calling on HMRC to provide Advisory Fuel Rates (AFRs) for electric vehicles.

The absence of definitive mileage reimbursement rates for 100% electric vehicles (EVs), plug-in hybrid models and extended range EVs is an obstacle to plug-in vehicle uptake on company car lists, ACFO suggests.

AFRs apply in cases where employers reimburse employees for company car business travel, or when employees are required to repay the cost of fuel used during private travel. Revised every quarter and deemed to be tax-free, they traditionally provide a range of rates for vehicles based on engine size and fuel type (petrol, diesel and LPG).

ACFO submitted its own proposals to HMRC last year, suggesting rates for EVs, range-extended EVs and plug-in hybrid petrol and diesel models. However, HMRC has indicated that “no change” to its approach should be expected.

The petition was launched on ACFO’s website and via social media, with plans to collect signatures in Bedfordshire’s Millbrook Proving Ground at the Company Car In Action event on June 12th and 13th.

ACFO’s proposals for AFRs included:

• 4p and 5p per mile for cars with a battery capacity up to 40kWH and above 40kWh, respectively

• Linking plug-in hybrid petrol vehicle AFRs to electric mileage range and engine capacity based on current AFRs for petrol cars (ranging from 5p to 19p per mile)

• Linking plug-in hybrid diesel vehicle AFRs to electric mileage range and engine capacity based on current AFRs for diesel cars (ranging from 5p to 12p per mile)

• AFRs for range-extended EVs calculated with above figures, based on a 90% electric mile range and 10% petrol/diesel mileage range

These calculations were made using a similar process to that used by HMRC in creating AFRs for petrol, diesel and LPG cars. Factors include mean battery capacity, electric mileage range and average battery recharge cost.

John Pryor, AFCO chairman, said: “Plug-in hybrid vehicles are at their most efficient when driven for as many miles as possible on electric power. Therefore, publishing lower Advisory Fuel Rates for plug-in cars will help to encourage drivers to use the car in the optimal environmentally-friendly way.”

While it possible for businesses to calculate their own AFRs and obtain permission from HMRC to use to reimburse drivers, Pryor suggests the process can be time-consuming and difficult to achieve with limited data. “Far better for HMRC to publish official figures as it does for petrol, diesel and LPG cars,” he said.

Despite Pryor’s disappointment that HMRC has failed to respond to ACFO’s proposals, the fleet representative body states its intention to keep up the pressure while hoping for fleet decision-makers to support their petition.

“We will submit the petition to HMRC in early autumn in the hope that the government will make an announcement in this year’s November Budget that it will introduce Advisory Fuel rates for plug-in cars,” he said.

“Advisory Fuel Rates for plug-in cars are essential. The rates we have provided to HMRC and the details as to how the figures were arrived at are as straightforward to apply as the current simple to use system for petrol, diesel and LPG cars.

“The figures we have calculated deliver a simple pence per mile mechanism that is both cost effective for employers so they are seeing a benefit from the more efficient technology, while employees are being fairly reimbursed for business mileage based on the capabilities of the plug-in vehicle technology.”