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Petition | 30 APRIL 2018

ACFO calls on fleet industry to back petition demanding HMRC publish Advisory Fuel Rates for plug-in cars

ACFO believes that the absence of defined mileage reimbursement rates for 100% electric vehicles, range-extended electric vehicles, and plug-in hybrid petrol and diesel models is a handicap to some organisations including plug-in vehicles on their company car choice lists.

The organisation has launched the petition on its website - and via its LinkedIn and Twitter channels; is planning on collecting signatures at forthcoming industry events - the Fleet Show at Silverstone on Wednesday, 9th May, and Company Car In Action at Millbrook Proving Ground in Bedfordshire on 12th and 13th June - and is calling on the fleet trade press to back the move.

The launch of the petition comes after ACFO hosted a fleet industry summit last year, which included representatives of the British Vehicle Rental and Leasing Association, contract hire and leasing companies, motor manufacturers producing plug-in vehicles and fleet managers operating zero emissions and plug-in hybrid cars. Summit participants have also been urged to support the petition and gather backing from their customers.

Following the summit, ACFO submitted a raft of data to HMRC that included:

  • Advisory Fuel Rates for cars with a battery capacity up to 40kWh and above 40kWh - 4p and 5p a mile respectively ·
  • Advisory Fuel Rates for plug-in hybrid petrol cars linked to electric mileage range and current engine capacity-based Advisory Fuel Rates for petrol cars - reimbursement rates ranging from 5p to 19p a mile.
  • Advisory Fuel Rates for plug-in hybrid diesel cars linked to electric mileage range and current engine capacity-based Advisory Fuel Rates for diesel cars - reimbursement rates ranging from 5p to 12p a mile.
  • Range-extended electric vehicles - calculated using above figures based on 90% electric mile range and 10% petrol/diesel mileage range using appropriate Advisory Fuel Rate figure.

Additionally, ACFO provided HMRC with information on how the summit delegates arrived at the pence per mile figures for plug-in cars.

The calculations follow a similar format to that used by HMRC to compile Advisory Fuel rates for petrol, diesel and LPG cars and include: mean battery capacity from manufacturers’ information, weighted by available models and average battery capacity (kWh); electric mileage range adjusted downwards by 15% to take account of real driving conditions and impact on manufacturers’ stated range; average battery recharge cost.

Advisory Fuel Rates for plug-in hybrid petrol and diesel models utilise the current Advisory Fuel Rates bandings based on engine capacity and are adjusted for electric mileage range: the greater the zero emission mileage range of a vehicle the lower the reimbursement rate.

Advisory Fuel Rates apply where employers reimburse employees for business travel in their company cars, or require employees to repay the cost of fuel used for private travel. Published quarterly, they provide a range of rates based on engine size and fuel type (petrol, diesel or LPG), and when used, are deemed to be tax-free.

Figures from the Society of Motor Manufacturers and Traders for the first three months of 2018 reveal that registrations of plug-in and hybrid vehicles continue to rise, “albeit modestly”, up 5.1% year-on-year, with demand for plug-in hybrids driving growth, up 18.2% last month.

ACFO chairman John Pryor said: “The government is driving fleets along the plug-in road, but corporate take-up is not in the last lane. One reason, ACFO believes, is due to their being no definitive mileage rate.

“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.

“ACFO acknowledges that it is possible for businesses to calculate rates themselves and then obtain permission from HMRC to use them to reimburse drivers. However, it can be extremely time consuming and difficult to obtain all the relevant data to undertake those calculations. Far better for HMRC to publish official figures as it does for petrol, diesel and LPG cars.”

ACFO is the ‘recognised voice of fleet’ and Mr Pryor said: “Despite the raft of information supplied to HMRC following the fleet industry summit and the widespread support for publication of Advisory Fuel rates for plug-in cars, ACFO is disappointed that HMRC has failed to respond.

“Nevertheless, ACFO intends to keep up the pressure and hopes that fleet decision-makers and the industry will support the petition in their thousands. 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.”

Mr Pryor concluded: “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 (hybrid cars are treated as either petrol or diesel models).

“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.”

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