The good news for drivers is those rates should cover the cost of the fuel and electricity used. Unfortunately they can also be also generous enough that a driver could choose not to plug in at all, and still wouldn’t be out of pocket. A lot of PHEVs have large petrol engines and would be able to claim at 27p/mile, which would result in some hefty travel expenses.
Although rates can be adjusted, it’s not a straightforward fix, as Association of Fleet Professionals chair, Paul Hollick, explains: “Generally, our advice is to use AFR rates as a minimum for PHEVs, otherwise employers need to track how many miles are done by each driver and vehicle on electric and on ICE power, which is extremely difficult and time consuming.
“In fact, in most real world conditions, there is an argument for paying more than AFR, as most PHEVs will cost in excess of the current rate to run.”There are some upsides to electricity getting a unique tax treatment, which can help keep costs down. Home charging is vital for BEVs and especially PHEVs, as it’s the cheapest and most convenient way to top up. The UK government has stepped up funding for charge points in flats and rental properties, but recently stopped offering support for homeowners in single-occupancy properties . Employers can also pay to install chargers at drivers’ houses, without any tax implications.