The Association of Fleet Professionals (AFP) and British Vehicle Rental and Leasing Association (BVRLA) are asking fleets to submit EV case studies to help support a push for an increased Advisory Electric Rate (AER).  

Both the BVRLA and AFP say the current AER is inadequate and are lobbying HMRC for an increase

The two organisations are in joint discussions with HMRC to build a case to raise AER – used to reimburse electric company car drivers for the cost of charging – from the current five pence per mile.  

While the AER ensures no taxable profit and no Class 1 National Insurance when employers pay this rate, both associations say it’s no longer reflective of real-world conditions.

Paul Hollick, AFP chair, explained: “Anyone who operates electric vehicles knows that the current AER is inadequate, especially given recent dramatic increases in the cost of electricity.  

“During our meetings, HMRC have indicated a willingness to review the rate but only on an evidential basis where there is a clear justification. In response, we are helping to identify better and more relevant data sources in addition to those currently used in setting the AER and part of that process means that we need to provide fleet case studies.”  

The case studies would ideally set out real-life examples of drivers who are out of pocket from the current 5ppm AER and covering diverse job roles, geographies, income demographics and electric vehicle models.  

Toby Poston, director of corporate affairs, outlined: “The collaboration between the BVRLA and AFP on topics such as this is vital in having our voices heard and strengthens our case to HMRC. Real-world examples from AFP members and their drivers will bring our argument to life and underline why we need a review of AER.”  

Fleets are being urged to send in their examples by the end of June, complying with a specific format:  

• Your industry: e.g. transport services 
• Job role: e.g. sales rep 
• Car (make, model, type – sedan or hatchback/SUV/van): e.g. Nissan, Leaf 30 kWh, hatchback 
• Car efficiency (miles per kWh): e.g. 4.1 miles per kWh 
• Location (county and rural/town/city): e.g. Yorkshire, town 
• Monthly business mileage: e.g. 800 
• Main reason for business mileage: e.g. visiting clients 
• Charging profile (home %, work %, public % [descriptor]): e.g. 20% home, 40% work and 40% public network [motorway] 
• Average charging cost (£ per kWh: home [tariff description], work and public): e.g. £0.21 home [fixed rate], £0 work and £0.61 public 
• Total charging cost per month (£): 
• Total reimbursement per month (£): 
• Shortfall under current AER (£): 
• Additional comments: e.g. “the current AER has made my EV unaffordable for me and I am trying to swap out of it”. 

Please send your examples to administration@theafp.co.uk and entitle your email ‘AER evidence’ by the end of June 2022.