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ACFO hails electric car AFR breakthrough

Date: 08 August 2018   |   Author: Sean Keywood

A new Advisory Fuel Rate (AFR) is to be introduced for 100% electric cars from 1 September.

The decision by HM Revenue and Customs (HMRC) will set the rate at 4p per mile. 

It has been welcomed by fleet operator organisation ACFO, which has been campaigning for a rate to be introduced.

The new AFR, to be called the Advisory Electricity Rate, will be published alongside the existing rates for petrol, diesel and LPG cars, which apply when employers reimburse employees for business travel in their company cars, or require employees to repay the cost of fuel used for private travel.

ACFO chairman John Pryor said: "I am delighted that HMRC has listened to the voice of ACFO and its members and introduced an AFR for 100% electric cars and at the rate we recommended.

"Historically, HMRC has consistently said that it did not consider electricity to be a fuel so for it to make this change is a major leap and will assist all fleets operating and seeking to introduce pure electric cars."

While ACFO has welcomed the new rate, it says it is disappointed that no such rate has been introduced for plug-in hybrid or range-extended electric vehicles, and it will continue to campaign for these.

Pryor said: "Plug-in hybrid vehicles are at their most efficient when driven for as many miles as possible on electric power. 

"Therefore, particularly with technology advances likely to increase the electric range of such cars, publishing appropriate Advisory Electricity Rates for plug-in hybrid cars will help to encourage drivers to use the car in the optimal environmentally-friendly way.

"Therefore, we will keep up the pressure on HMRC to introduce Advisory Electricity Rates for plug-in hybrid cars as well as for range extended electric vehicles."