BY joining forces and intensely lobbying government, the British Vehicle Rental and Leasing Association (BVRLA) and Association of Fleet Professionals (AFP) have persuaded HMRC to increase the Advisory Electricity Rate (AER) for electric vehicles.
The AER has been increased from four to five pence per mile, according to the HMRC’s web site. This 25 percent increase follows intensive conversations with the two trade organisations.
Five pence per mile is still considered too low, says AFP chair Paul Hollick. However, it establishes the principle of revisiting and revising the AER rate as part of conversations between industry bodies and HMRC, which is an important development.
The previous AER was just 4ppm which generally failed to cover reimbursement of fuel costs when most individuals are now paying closer to an estimated 18 pence per kwh even when charging at home, according to Hollick.
We very much welcome this move by HMRC. In truth, 5ppm is probably still too low. Recent research among our members saw 6-7ppm mentioned as an appropriate rate. But this does represent an increase of 25 percent in one step, which is quite substantial.”
Gerry Keaney, Chief Executive, BVRLA, said the EV market is maturing and is no longer a niche.
We need a mileage recompense rate that can adapt to energy prices and charging trends, so we are pleased to see HMRC respond so swiftly to the lobbying from AFP and BVRLA. The AER for electric vehicles has not changed since 2018. This uplift is a positive move and shows that the Government is serious about providing a supportive environment for the push to zero emission motoring.”
BVRLA members represent the demand-side of the automotive industry, buying around 50% of new vehicles, including over 80% of those manufactured and sold in the UK. Together with its members, the association works with policymakers, public sector agencies, regulators, and other key stakeholders to ensure that road transport delivers environmental, social and economic benefits to everyone. BVRLA members are leading the charge to decarbonise road transport and are set to register 400,000 new battery electric cars and vans per year by 2025.
AFP brings together ACFO, a non-profit making organisation representing the interests of businesses which operate cars and vans as part of their normal commercial activities; and ICFM (the Institute of Car Fleet Management), the UK’s only independent not-for-profit organisation dedicated to furthering the education, recognising the achievements, and advancing the profession of car and light commercial fleet management.