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TMC publishes updated advice on business mileage payments for plug-in vehicles

TMC publishes updated advice on business mileage payments for plug-in vehicles

TMC has published an updated version of its guide to reimbursing drivers of company-run or ‘grey fleet’ electric and plug-in hybrid cars.

The company works with employers across Europe to deliver visibility, control and cost savings across all their fleet and travel operations.

Its advice on reimbursing drivers of wholly-electric vehicles includes the new Advisory Electric Rate (AER) for electric vehicles of 4p per mile, announced by HMRC in September.

TMC expects the guide to be of particular interest to fleets running plug-in hybrid cars (PHEVs), following the recent BBC News story – ‘Government-subsidised plug-in cars may never have been charged’ - where TMC real-world MPG data revealed that many plug-in hybrid vehicles actually cost more in fuel pence-per-mile than typical diesel or petrol company cars due to drivers not charging them.

Paul Hollick, managing director of TMC, said: “While the Advisory Electric Rate (AER) for electric vehicles satisfied calls for a simple reimbursement rate for company car and cash allowance drivers of pure electric vehicles, the extreme variability of plug-in hybrid vehicles’ fuel consumption sets them apart from both electric and combustion vehicles.

“Employers have the option of applying the appropriate Advisory Fuel Rates for petrol or diesel to plug-in hybrid electric vehicles. But with plug-in hybrid electric vehicles’ fuel use varying by up to 300 MPG depending on the drivers’ journeys and charging practice, reimbursing for plug-in hybrid vehicle fuel at a flat rate will rarely be realistic or fair.

“There are alternatives to advisory fuel and electric rates, of course. With every type of drivetrain there is the option to reimburse fuel at actual cost (calculated from mileage and fuel purchase data). Or employers can set their own fuel rates, provided they are no higher than the relevant Advisory Fuel Rate, or can be substantiated if they are.

“In the meantime, the key point for businesses to keep in mind is that plug-in hybrid vehicles offer a valuable bridge between combustion and fully-electric vehicles. Used correctly, plug-in hybrid vehicles can deliver significant real-word operating cost savings.

“Our guide describes how to capture those savings by paying rates that fairly reflect plug-in hybrid vehicles’ real-world cost-per-mile potential, using methods that fully comply with the rules on fuel reimbursement.”

TMC’s guide also contains advice on settling claims for business mileage incurred by private plug-in owners, describing how fleets can calculate the correct adjustments to Approved Mileage Allowance Payments. It also covers deductions for private use for fuel card users.