HM Revenue and Customs has issued new guidance on the Advisory Fuel Rate (AFR) for electric cars announcing that from September 2018 fleets will be able to use an AFR of 4 pence per mile for fully electric cars.
There will, however, continue to be no separate AFR for plug-in hybrids and range-extended electric vehicles.
Advisory Fuel Rates are used to reimburse employees for business travel in their company car or when employers require employees to repay the cost of fuel used for private travel.
Dubbed the ‘Advisory Electricity Rate’, the new rate will mean there will be no taxable profit and no Class 1 National Insurance when employers pay up to the 4ppm rate for fully electric cars.
The BVRLA is actively campaigning for measures that encourages the take-up of a greater number of low-emission vehicles and so welcomes this news which will further incentivise the use of electric vehicles for business purposes.