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Electric car business mileage rates

HMRC has finally released official business mileage rates for fully electric cars. This is known as the Advisory Electricity Rate or AER
Nissan LEAF 2018_charging
Business mileage rates for electric cars: confirmed by HMRC for use from September 01, 2018

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29 August 2018

AFTER years of pressure from the fleet decision makers’ organisation ACFO, HMRC is finally publishing electric car business mileage rates.

From September 01, 2018, the official HMRC rate is 4p per mile.

This is the Advisory Fuel Rate for electric cars. Or, to use the correct HMRC term, Advisory Electricity Rate (AER). All current company car mileage rates can be found here: New company car business mileage rates.

Running a vehicle for business?

Don't leave yourself out of pocket - a guide to what you can claim.

HMRC advises that as long as the appropriate AER charge of 4p per mile is used for reimbursing staff for electricity in their fully electric car, there will be no taxable profit and no Class 1 National Insurance to pay.

However, unlike petrol or diesel company cars, HMRC says that electricity is not a fuel for car fuel benefit purposes.

Currently the Advisory Fuel Rates are used to reimburse business mileage without incurring benefit-in-kind taxation for petrol or diesel cars.

For drivers of hybrids HMRC says you should use the appropriate petrol or diesel rates depending on the fuel used by the engine.

Now reader Chris Sullivan can claim for his Nissan Leaf company car

The AER rates for electric cars will be welcome news to Business Motoring reader Chris Sullivan.

Business woman charging up an electric car
Use your private electric car for business and claim 45ppm

He contacted us to say he personally paid for the electricity that powers his Nissan Leaf company car – at 5p per mile or £400 per year – and couldn’t find an electric business car mileage rate to claim back his expenditure.

Now he can use the electric car company car business mileage rates to do so.

Had Chris bought his Nissan Leaf privately, then he would have been able to claim his business mileage rates via the AMAP rates, which would be 45p per mile tax free for the first 10,000 miles of business mileage, and 25p per mile thereafter – see the comments section of our story Tax: Business mileage rates for using a private car (AMAP)s.

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Ralph Morton

Ralph Morton

Ralph Morton is an award-winning journalist and the founder of Business Car Manager (now renamed Business Motoring). Ralph writes extensively about the car and van leasing industry as well as wider fleet and company car issues. A former editor of What Car?, Ralph is a vastly experienced writer and editor and has been writing about the automotive sector for over 35 years.

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