Article | Guide

Manage business mileage expenses for electric cars

027 Jan 2023

Electric company car drivers can now claim five pence per business mile. Great news…or not?

The 25% rise in the HMRC advisory electricity rate (AER), from four to five pence per mile, was gratefully received in November 2021 by the Association of Fleet Professionals and British Vehicle Renting and Leasing Association. Both have electric company vehicle drivers' best interests at heart - lobbying last year for this first revision since the introduction of the AER in 2018.

The increase has opened the door to further reviews of this rate – a positive step in helping businesses and drivers who are moving towards electrification. However, in the meantime, the sharpest gas price increase in thirty years, which also took place last year, is set to have a knock-on effect of, on average, 35% on electricity bills from April 2022.

The financial impact of this rise, together with the varying costs of charging electric vehicles across home, work and public charge points, mean that most electric company car drivers claiming the advisory electricity rate will still be significantly out of pocket. With large electric van drivers needing up to three times more in real-world reimbursement.

Is a company EV business mileage reimbursement policy the answer?

There’s no doubt the answer might be yes for your business. Setting your own mileage rate will ease your conscience, knowing your drivers won’t foot the bill for business travel. However, for many, trying to work out an exact rate that compensates for the variable prices across charging networks is a headache at the very least and may still leave drivers at a loss. For example, with pay as you go bp pulse7 7kW or bp pulse50 50kW chargers, they would pay 6.7 or 9.7 pence per mile respectively. Whereas charging at an Ionity 50-350kW unit would cost them twenty-three pence per mile.

Any private mileage would then have to be logged by the driver and the energy costs deducted from their salary. This means relying on your company vehicle drivers to separate the two sets of mileage and a significant amount of admin for your payroll team.

Drivers using their own electric vehicles for business mileage are entitled to the standard approved mileage allowance payments of forty-five pence per mile or twenty-five pence per mile after ten thousand miles. This has to cover all wear and tear – as with their petrol, diesel and hybrid counterparts.

How can I take control of my business’s electric car mileage expenses?

The short answer is to reduce, or completely eliminate, the whole rigmarole of claiming back expenses. How? Provide your electric company car and grey fleet drivers with solutions that keep your business in the driver’s seat – with less admin for everyone.

1. Fuel and electric charging card for mixed fleets

As a business with a mixed fleet, you’ll know that the cost of charging an electric vehicle – whether at home, work or on the go – can be cheaper in pence per mile than running petrol, diesel and hybrid vehicles. However, you’ll also be aware of the many reasons time and consideration are needed before you can fully electrify your fleet.

Instead of your finance team receiving multiple expense sheets across your different vehicle types, a mixed fuel and electric charging card will keep everything in one place. For example, the BP Fuel & Charge Card includes:

  • Centralised billing – with electric, hybrid and ICE mileage all on one dashboard

  • One supplier – huge admin savings with one integrated solution for your entire fleet

  • Integration with other bp pulse solutions – again with a centralised view and billing

  • One card for all drivers – with access to 3,400 forecourts and 8,000 pulse points

  • 24/7 support – our team is here to help as you transition to electric

Get started with workplace and business EV charging

Whether you’re planning developments, running a fleet, or looking to transition workplace, hospital or retail car parks, we’ll help build an EV strategy around you.

2. Fleet electric charging card subscription

With differing public charging costs that are generally more than the HMRC five pence per mile reimbursement rate, a business charging card subscription will give you peace of mind that your drivers’ ‘on the road mileage’ is completely covered. They can take care of their own private charging, so you don’t have to deduct costs from their wages.

For example, a bp pulse on the go – Corporate subscription includes:

  • Centralised billing – with every driver’s business mileage visible in one place

  • Free or best-rate tariffs – discounted rates for you and a guarantee of full reimbursement for them, for a fee of just £6.64+VAT per driver per month*

  • Access to more than 8,000 charge points – that’s across the UK with exclusive use of bp pulse150 ultra-fast chargers on bp forecourts

  • 24/7 support – our team is on hand to guide and advise, all year round

You may also be eligible to access our innovative city EV fleet hubs.

*plus cost of electricity

3. Workplace charging network

More and more businesses are taking advantage of the Workplace Charging Scheme to receive up to £14k (or £350 per socket) from the Office for Zero Emission Vehicles to develop their own on-site or multi-site charging network.

The beauty of installing your own chargers at work is you can offer free or low-tariff charging to your fleet – and other staff that drive their own electric vehicles to work – and offset this with higher tariffs for external visitors. For example, a bp pulse workplace solution can include:

  • Tailored solutions advice – whether you’re an office or fully-fledged fleet depot

  • A free site survey – and Workplace Charging Scheme grant application support

  • Workplace online platform – to help you manage tariffs and charging use

  • Futureproofed charging infrastructure – with access card for cars, vans and HGVs

  • 24/7 support – our team is here to help, every step of the way

4. Home charging rebate

You may be wondering how you can get away from home charging expense sheets. Particularly as overnight rates are cheaper with Economy 7 or 10 tariffs, at around 3.3 pence per mile. Or, if you haven’t yet had your workplace network installed, it’s a
no-brainer that your drivers should charge at home and top-up with charging on the go.

The truth is, once you’ve taken charge of the workplace and on the go charging, dealing with home charging expense sheets becomes a far more manageable exercise.

Need advice and support from our experienced team?

Whatever stage you’re at in your transition planning, our EV experts are here to guide and support you. Get in touch or request for one of our team to come back to you below

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