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How do drivers claim back the cost of electric vehicle charging

5 min to readElectric vehicles
What mileage rates are available for electric vehicle drivers, and are they still covering the rising cost of energy? Read more
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What mileage rates are available for electric vehicle drivers?

HMRC issues different rates depending on who owns the vehicle, and how it’s used.

How much does an electric car cost to run?

The ‘fuel’ costs for an electric vehicle are just as varied as their petrol, diesel or hybrid counterparts. Larger, heavier vehicles are generally less efficient than smaller, lighter ones, and even competitor vehicles can vary. Some examples are shown below:

Car
Charging cost per mile
Fiat 500 Icon Hatch
4p
Volkswagen ID3 Life Pro
5p
Kia Niro EV 3
5p
Polestar 2 Long Range Single Motor
5p
Audi e-tron Sport 50 quattro
7p
Electricity costs based on 2021 UK average 18.9p/kWh

Although there are multiple Advisory Fuel Rates (AFRs) to suit different engine sizes and fuel types, the 5p per mile Advisory Electric Rate (AER) is the same for all electric cars. This could leave some drivers out of pocket, even if they charge at home – which is usually the cheapest, most convenient place to plug in.

The AMAP is always the same, regardless of fuel type. With the latest LeasePlan Car Cost Index showing the electric Volkswagen ID.3 is between 20% and 26% cheaper to run than a petrol, diesel or plug-in hybrid Golf in the UK, it should cover drivers’ costs if they use their own car for work.

Are mileage rates keeping pace with rising EV charging costs?

Europe is in the grip of a once-in-a-generation energy crisis. Global demand for wholesale gas was already outstripping supply before Russia’s invasion of Ukraine, and subsequent embargoes on Russian energy, in February. This also affects electricity prices, as 37.9% of the UK’s supply was generated using gas in 2021 and in turn this is increasing the cost of charging on the road and at home.

HMRC increased the AER from 4p/mile to 5p/mile however in Autumn 2021. However, despite adjusting rates for petrol and diesel cars to match rising pump prices, the AER has not increased in line with home or public charging costs.

The following table shows charging costs for the Kia Niro EV at 3.8 miles per kilowatt-hour (WLTP, combined).

May 2021
May 2022
Charging location and tariff
Cost/kWh
Cost/mile
Cost/kWh
Cost/mile
Home: Standard flat-rate tariff
18.9p
5p
28p
7p
Public: BP Pulse PAYG (7kW, member)
12p
4p
35p
12p
Public: BP Pulse PAYG (50kW, member)
15p
5p
43p
14p
Public: Electric Highway (Rapid Charger)
30p
10p
48p
16p
Public InstaVolt
35p
12p
57p
19p
Public: Ionity (50-350kWh)
69p
23p
69p
23p

HMRC advises that mileage rates can be adjusted to reflect real-world running costs, as long as fleet operators can prove these are accurate and do not include private journeys. Otherwise, this may be classed as additional income and can be taxed.

What systems are available to track charging costs at home, on the road and at work?

There are several automated reimbursement solutions which log home, workplace and public charging sessions under a single account, then invoice employers automatically for any business mileage involved. These can provide a more accurate indication of travel expenses, while reducing the administrative burden compared to manual claims.

LeasePlan recognises that, for corporate clients, capturing personal and business mileage is key to managing reimbursement. We work with a number of carefully selected suppliers and can give expert advice to help guide you towards a reimbursement solution suited to your needs.

Centrica Fleet Charging Management System:

Centrica used experience from managing its own electric vehicles to develop a charging and reporting solution tailored to fleets. The system links to employees’ home charge points (regardless of manufacturer) and drivers are provided with an RFID tag to access workplace chargers and selected public networks, with usage aggregated into a single monthly statement detailing driver usage for the fleet manager. The report includes detail for payroll management to enable the client to easily manage their driver reimbursement via their existing payroll process.

Shell Recharge Solutions

Shell offers an automatic reimbursement solution which connects drivers’ home chargers to an account which provides roaming access to a growing choice of public networks (including on-street networks Char.gy and Ubitricity) and workplace charging via a single RFID card or app. Shell will then invoice the employer for charging sessions on the road and reimburse employees directly for business-use energy drawn at home minimising impact of drivers personal cash flow.

Shell also provides a mixed-use fuel card designed for fleets with electric and ICE vehicles, which includes both charge point access and payment for petrol or diesel, enabling operators to minimise fleet administration and keep costs under control.

The Miles Consultancy (TMC):

TMC’s reimbursement service for electric vehicle charging can take in and collate data from domestic, company and public charging. This can help provide cost-effective and fair reimbursement – either using the AER or actual costs. The company also offers an easy-to-use system for pay and reclaim public charging and an electric charge card which can pay for sessions at 92% of the UK’s public charge points.

Published at 29 November 2022
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29 November 2022
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