Can you still claim 45p per mile for an electric car?

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In short, the answer is no. HMRC has set a different rate when claiming for business mileage when driving an electric vehicle. The Advisory Electricity Rate (AER) is currently set at 5p per mile.

But is this rate enough and does it reflect real world costs?

With the ongoing energy crisis, the cost of electricity has risen sharply. On April 1, the price cap increased for approximately 22 million customers on default tariffs paying by direct debit by £693 from £1,277 to £1,971 per year, and for prepayment customers from £1,309 to £2,017, OFGEM said.

This, of course, has a financial impact on the cost of charging an electric vehicle. According to Mina's data, the current (July 2022) average pence per kWh is 24p, so to simplify our scenario - an employee with a home tariff rate of 24p per kWh will, on average, see a pence per mile of 8p, this is based on an average of 3 miles per kWh.

This would result in a yearly loss of £600!!

The Advisory Electricity Rate (AER) is a pence per-mile reimbursement rate set by the government, which currently sits at 5p per mile for employees using an electric company vehicle.

Drivers might resent doing business miles that are personally costing them money, so you could ignore the Advisory Electricity Rate and come up with a figure you feel is more reasonable and accurate.

However, you should be very careful when doing this. You must be able to provide evidence to HMRC that you are paying the actual cost of the energy and no more or you will incur, at least, Benefit-in-Kind tax charges on the reimbursement, or you might even end up with an inspection from the taxman.

The good news though, with Mina, businesses don't pay any Benefit-in-Kind charges on payments made over the AER, as we're HMRC approved!

Our award winning solution was created to bring 100% accuracy and unrivalled simplicity to fleet charging payments.

  • Pay direct to your drivers' energy suppliers for home charging with Mina Homecharge®
  • Access Mina Chargepass®, the UK’s largest aggregate fast charger network
  • 100% accurate charging costs guaranteed with no admin costs