Workbench Logo
Workbench Logo
Workbench Logo
Workbench Logo
Workbench Logo

TMC guide sets out fair mileage reimbursement for PHEVs

By / 2 years ago / UK News / No Comments

TMC has published an updated version of its concise guide on business mileage rates with latest advice on reimbursing fleet drivers of electric and plug-in hybrid cars.

Mitsubishi Outlander PHEV

The TMC guide covers reimbursing drivers for PHEV use

The guise not only covers reimbursing drivers of wholly electric vehicles using the new Advisory Electric Rate (AER) announced by HMRC in September but also includes advice on fairly reimbursing drivers for plug-in hybrid use in the continued absence of official AFRs for such vehicles.

It follows the publication last month of TMC’s real-world mpg data that revealed many PHEVs 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 EVs, the extreme variability of PHEVs’ fuel consumption sets them apart from both electric and combustion vehicles.

”Employers have the option of applying the appropriate AFR rates for petrol or diesel to PHEVs. But with PHEVs’ fuel use varying by up to 300mpg depending on the drivers’ journeys and charging practice, reimbursing for PHEV 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 AFR, or can be substantiated if they are.

“In the meantime, the key point for businesses to keep in mind is that PHEVs offer a valuable bridge between combustion and fully-electric vehicles. Used correctly, PHEVs can deliver significant real-word operating cost savings. Our guide describes how to capture those savings by paying rates that fairly reflect PHEVs’ 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 AMAPs.  it also covers deductions for private use for fuel card users.

To download the TMC guide, click here.

For more of the latest industry news, click here.

Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. Natalie edits all the Fleet World websites and newsletters, and loves to hear about any latest industry news - or gossip.