Government needs to steer corporate EV uptake into the fast lane, says ACFO
16 May 2018
Author: Rachel Boagey
The fleet operator organisation is demanding AFRs from HMRC. Rachel Boagey investigates.
The absence of defined mileage reimbursement rates for 100% electric vehicles (EVs), range-extended EVs, and plug-in hybrid petrol and diesel models discourages some organisations from including plug-in vehicles on their company car choice lists.
This is according to fleet operator organisation ACFO, which has launched a petition calling on HM Revenue and Customers (HMRC) to publish advisory fuel rates (AFRs) for plug-in cars.
ACFO said the launch of its petition, which is available on its website, comes after it 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.
"The AFR process has been an unqualified success for fleets in that they have a clear rate that can be used for fuel reimbursement," John Pryor, ACFO chairman told BusinessCar.
"These new engines technically have never been included.
"The rate for plug-ins will encourage the correct use of these vehicles and drivers should be charging them before journeys to use to their maximum."
Following the summit, ACFO said it had submitted data to HMRC, including the following:
- AFRs for cars with a battery capacity up to 40kW/h and above 40kW/h - 4p and 5p a mile respectively
- AFRs for plug-in hybrid petrol cars linked to electric mileage range and current engine capacity-based AFRs for petrol cars - reimbursement rates ranging from 5p to 19p a mile.
- AFRs for plug-in hybrid diesel cars linked to electric mileage range and current engine capacity-based AFRs for diesel cars - reimbursement rates ranging from 5 to 12p a mile.
It added that range-extended EV rates should be calculated using the above figures based on 90% electric mile range and 10% petrol/diesel mileage range, using appropriate AFR figures.
The government is driving fleets along the plug-in road, but corporate take-up is not in the fast lane. One reason, according to ACFO, is the current lack of a definitive mileage rate.
"We understand that electric is even more difficult in that it is not recognised and as more of these vehicles come on with longer ranges the rate needs to be agreed," said Pryor.
"But these powertrains are out there and we have petrol, diesel and LPG, so why are these powertrains not being accounted for? We understand at the start uptake was low, but there is traction and we all know this will increase."
Pryor hopes that publishing lower AFR rates for plug-in cars will help to encourage drivers to use the car in the optimal environmentally friendly way. "It should encourage them to plug in and use the vehicle as it was designed," he said.
"This is all part of the whole cost of the vehicle and we know and have advised for some years that consideration needs to be made of vehicle powertrains more than ever. This will only increase with the development of clean air zones."
While ACFO acknowledges that it is possible for businesses to calculate rates themselves and then obtain permission from HMRC to use them to reimburse drivers, Pryor says it can be extremely time-consuming and difficult to obtain all the relevant data to undertake those calculations. "It is far better for HMRC to publish official figures as it does for petrol, diesel and LPG," he said.
Pryor said ACFO was disappointed that HMRC had failed to respond to its submission, but added, "Nevertheless, ACFO intends to keep up the pressure and hopes that fleet decision-makers and the industry will support the petition in their thousands.
That's why ACFO got in contact with BusinessCar, explained Pryor. "We need to get to businesses as that is what sways government departments. The leasing industry is perhaps seen as a vested interest. The sophistication of the BusinessCar reader is vital to get this message out."
ACFO intends to 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 AFRs for plug-in cars.
"We hope that a large response to our petition will focus their minds. It is not just company but fleet size as these vehicles are already on our roads now," concludes Pryor.