I suggest 35p per mile 0 0 Reply; Reply as guest. We use this information to make the website work as well as possible and improve government services. Company cars and using the advisory fuel rate. Latest Any Answers . Recently released draft HMRC guidance sheds more light on the tax treatment when an employee charges their own electric car at work, but the treatment of business mileage payments relating to electric cars continues to leave many in the dark . It applies to cars that are privately owned and to company cars, provided that the charging facility is located “at or near the workplace” and is available for all employees to use. This cannot exceed 45p per business mile up to 10,000 miles per tax year and 25p per mile thereafter. What the new VAT filing changes mean. HMRC will introduce an advisory fuel rate (AFR) for pure electric cars from September 1 at 4 pence per mile (ppl). If you pay rates that are higher than the advisory rates but cannot show the fuel cost per mile is higher, there will be no fuel benefit charge if the mileage payments are only for business travel. Earlier this year, the Government revealed electric vehicles will be exempt from company car tax in the 2020/21 tax year. When employees are reimbursed for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance to pay. Results from an investigation by the RAC Foundation, which considered the mileage recordings of cars at their first MOT date when odometer readings have to be submitted, found some interesting facts about average electric car mileage. Here are five electric cars that have the best mileage, according to Kelley Blue Book. Don’t worry we won’t send you spam or share your email address with anyone. You drive two cars for the same job, driving 3000 miles with Car One and 6000 miles with Car Two. Personally owned cars If an employee uses their own electric car for business purposes, Approved Mileage Allowance Payments (AMAPs) apply in the same way as for petrol or diesel cars: Any reimbursement by the employer for business mileage is tax and … So if an employee travels 8,000 miles for business purposes in their own fully electric car they could claim 8,000 x 45p = £3,600. It just covers the cost of owning and running a vehicle, including VED tax, MOTs and repairs. HMRC fuel advisory Suggests . This article explains the tax implications of using vehicles at work, whether they are petrol or diesel cars or electric/hybrid. The Miles Consultancy (TMC) has produced a guide showing how businesses can calculate mileage repayment rates for electric and hybrid company cars instead of using HMRC’s advisory fuel rates or approved mileage allowance payments, which only cover petrol and diesel cars …but now pure electric cars pay no company car tax. 5. HMRC obliged and issued a new electric car business allowance called the advisory electric rate (AER). This is important when claiming VAT on mileage expenses. You can change your cookie settings at any time. Industry insights . 4th Dec 2020. HMRC calls this rate the Advisory Electricity Rate (AER). Mileage expenses on an electric personal vehicle. They are also known as “HMRC company car mileage rates”. Since the total mileage does not exceed 10,000 miles, you can be reimbursed at 45p per mile for your total mileage. You must not use these rates in any other circumstances. The advisory fuel rates from 1 December 2020 have been added and information on how the advisory fuel rates are calculated has been updated. They will cost less to run, are more environmentally friendly and they are significantly more tax efficient. Well, AMAP is not fuel dependent. HMRC approved mileage allowance payments (AMAPs) can be paid tax and NI free to employees using their own cars, motorcycles or bicycles for business as shown in the table below If your employer reimburses you at a lower mileage rate than the HMRC advisory rate, or does not reimburse your mileage, you will be able to claim Mileage Allowance Relief (MAR). If you’re interested in learning about electric car business allowances, we created a complete guide to show you how to decide an electric car mileage allowance for your business. Planning for Brexit: Services provided by businesses for consumers in the EU. Name. As a milestone decision, this is the first opportunity for company cars to be taxed at 0% as a benefit in kind (BIK), helping businesses make the transition to zero emission vehicles and a potentially emission-free future. To help us improve GOV.UK, we’d like to know more about your visit today. The rate for subsequent miles is 25p per mile. A - Use the relevant petrol or diesel figure. However, with more than half (56%) of company car drivers unaware of HMRC rules on reclaiming business mileage, this blog aims to clarify claim allowances and eligibility. Don’t include personal or financial information like your National Insurance number or credit card details. Consequently, many people decide to use their own car and claim a mileage allowance instead. A company car is seen as a perk, or a benefit-in-kind, by HMRC and taxed accordingly as if it were extra income. Some confusion has been reported over how businesses should calculate mileage expenses rates for electric and hybrid company cars. Conclusion: The Most Cost-Effective Cars for Your Business to reimburse the employee for business mileage, or; for the employee to reimburse their employer for the cost of fuel which has been used for private mileage. Hybrid or range-extender company cars will have the appropriate HMRC rates applied depending on whether they’re diesel or petrol. You should also keep in mind that the HMRC rates don’t consider whether a driver mainly uses the electric motor or petrol engine. Electric cars - personal mileage claims. The advisory electricity rate for fully electric cars is 4 pence per mile. Mileage allowance guide; Mileage allowance for self-employed . Although HMRC agreed to adopt the AER for fully electric vehicles it didn’t accept any changes for hybrids. a car, van, bicycle or motorbike. Email (will not be shown) Notify me when people reply Login / Register. Your employer uses HMRC's AMAP rate of 45p per mile. HMRC publish advisory fuel rates, the rate for electric cars is 4ppm. The advisory fuel rates are worked out from the fuel prices in these tables. In fact, HMRC explicitly state that their company car Advisory Fuel Rates (AFR) can’t be used for electric vehicles, (although curiously, they can be used for hybrid vehicles; even if the driver mainly uses the electric motor rather than the petrol engine!). Advertisement . Claim capital allowances so your business pays less tax when you buy assets - equipment, fixtures, business cars, plant and machinery, annual investment allowance, first year allowances Advisory fuel rates from 1 March 2020 Some confusion has been reported over how businesses should calculate mileage expenses rates for electric and hybrid company cars. A - Use the relevant petrol or diesel figure. HMRC has announced the introduction of an advisory fuel rate for 100% electric cars from September 1 at 4p per mile. HMRC sets mileage reimbursement rates for electric cars. Related articles. But what happens if you’re driving a company car for your business mileage? Example - tyres & insurance still need to be paid for. HMRC specifies that the 45 pence per mile (or the 25 pence per mile) is meant to cover expenses beyond fuel, such as fixed expenses (insurance, road tax, depreciation) and the variable (wear and tear) costs of running your car. I am considering purchasing an Electric Car. The ‘rates per mile’ calculated in these tables are shown rounded to one decimal place, but the final advisory fuel rates are rounded to the nearest whole penny. Claiming mileage for a hybrid . Will I be able to claim 45p per mile as I do currently for my Diesel car or will there be a new allowance set as there has been for Company Car mileage? For example, if an employee travels 8,000 business miles in their fully electric company car, they can receive £320 in mileage for the tax year free of tax or NIC. When employees are reimbursed for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance to pay. 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