The approved mileage allowance rate is paid when an
employee uses their own car for business purposes, and is designed to include
the cost of running the car (not just the fuel). For company’s which provide
their employees with a car, the advisory fuel rates are applied to reimburse
for the fuel cost alone.
Currently HMRC does not consider electricity as a fuel,
so where does it fit into the picture?
are various possible ways of working out the payable rate for these cars, but
the key is to reimburse the employee at a rate which reflects the true cost to
logical, yet complicated way of calculating the allowance would be to calculate
the percentage of electricity used to charge the vehicle (from a domestic
supply). The rate per mile would be calculated using the car manufacturers published
range and kWh battery rating.
the car in question is a company vehicle, the advisory fuel rate could be paid
(based on a petrol or diesel engine)
the vehicle is personal and used for business, the approved mileage allowance
of 45p per mile (up to 10,000) can be used (25p for each subsequent mile).
a rate than can be calculated accurately as a true cost to the employee, and
can be substantiated if subject to an audit.