New guide helps fleets to reimburse business mileage in EVs and hybrids
Fuel management specialist TMC has published a guide to help companies accurately reimburse drivers of alternatively fuelled vehicles for business mileage.
The guide sets out different reimbursement methods for battery-powered vehicles, hybrids and plug-in hybrids (PHEVs) in the UK.
- In the UK, the Government has recently published an Advisory Electric Rate (AER) of 4 pence per mile for business mileage in a company electric vehicle.
- Alternatively, employers can reimburse company drivers on the basis of estimated electricity costs from a domestic supply
- Or pay the actual cost of domestic power consumed by the EV.
PHEV mileage reimbursements are more complicated, however, with payments split between petrol/diesel and electric.
“With PHEVs' fuel use varying by up to 300 mpg depending on the drivers' journeys and charging practice, reimbursing for PHEV fuel at a flat rate will rarely be realistic or fair,” cautions TMC.
The consultancy advises that employers can:
- Pay company drivers the official Government approved petrol or diesel reimbursement rate.
- Reimburse on a mix of electric and fossil fuel reimbursement rates for each journey, based on the zero emission range of the vehicle.
- Use a blended figure of fuel and electricity rates.
- Or pay the actual cost incurred by the employee.
For hybrid vehicles, TMC advises that employers can:
- Pay the official Government approved petrol or diesel reimbursement rate.
- Pay a figure based on a blend of petrol/diesel and electric – this figure must be below the official reimbursement rate for vehicles with internal combustion engines.
- Calculate the true cost to the employee and use this figure.
Fuel cards of the future
“Employees who run a PHEV or hybrid vehicle may still require a fuel card. Drivers of EVs could be issued with an expense card that the employee can use at public electric charge points,” said TMC.