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Advisory Electric Rate rises to 8p per mile; Advisory Fuel Rates stay static

 Published 21st November 2022
General Guides  HMRC / Tax 

In a significant change to the Advisory Electric Rate (AER), HMRC has increased the pence per mile claimable from 5p per mile to 8p per mile.

The AER - which started at 4p per mile before rising 25% to 5p per mile in November 2021 - has been criticised by the fleet industry, along with industry groups the BVRLA and Association of Fleet Professionals, for failing to recompense drivers for the real cost of electricity used.

The change is effective from 1st December and will now be reviewed on a quarterly basis along with the petrol and diesel Advisory Fuel Rates (AFRs).

Rob Marshall, Operations Director of Gateway2Lease, commented:

“I think the increase reflects a real acknowledgement from the HMRC that its current AER was out of touch with the true cost of charging - effectively allowing company car drivers to subsidise their business travel. So this is an important step forward in electric car drivers being treated more fairly.”

The new AER rates only apply to fully electric vehicles. Drivers of hybrid and plug-in hybrid cars should use the appropriate rate of either petrol or diesel Advisory Fuel Rates.

These have remained at the same rate as those set in September, reflecting the continued high fuel prices at the fuel pumps.

The AFRs can be used to claim business mileage in a company car without incurring fuel tax. HMRC Advisory Fuel Rates

Diesel: engine size (cc) Advisory Fuel Rate
Up to 1,600cc 14 pence (no change)
1,601cc - 2,000cc 17 pence (no change)
Over 2,000cc 22 pence (no change)

Petrol: engine size (cc) Advisory Fuel Rate
Up to 1,400cc 15 pence (no change)
1,401cc - 2,000cc 18 pence (no change)
Over 2,000cc 27 pence (no change)

Photo: Osprey Charging

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