Advisory Electric Rate Mileage Calculator
When employees recharge electric company cars at home, employers can reimburse their employees for the cost of electricity using HM Revenue & Customs' published Advisory Electricity Rates ('AER').
The Advisory Electricity Rate for business mileage is similar to the Advisory Fuel Rates used for reimbursing employees for business mileage in a petrol or diesel cars. The mileage rate reimburses the employee for the cost of electricity used per business mile in the vehicle.
The Advisory Electricity Rate is reviewed every quarter by HMRC, but with volatile electricity costs the published rate may be out-of-date when an employee is reimbursed for 'home' or 'away' charging.
HMRC recognises this and allows employers to reimburse employees according to actual recharging costs per mile, subject to the employer retaining proof suporting the reimbusement rate used.
So how do you calculate the amount to reimburse employees when the Advisory Electricity Rate for business mileage is out-of-date or doesn't reflect the actual costs of home or away charging?
Well, don't worry, we've built a calculator to do this for you.
About Our Calculator
Our AER calculator will work out for you the actual mileage rate you need to reimburse an employee for driving an electric company car on business mileage.
We take account of the different costs of home and away charging, and you can even include standing costs (for electricity at home) or subscription/connection charges (for away charging).
How To Use The Calculator
For help on how to use the calculator or in understanding the results just click on the '?' button in the top right corner of the screen.
Our Help explains what to do and how to interpret the results too.
What You Will Need
HMRC will need proof that the mileage rate paid is a genuine calculation of the cost of electricity used on business mileage.
What you will need for proof and to use the calculator will depend on whether you are reimbursing home or away recharging costs:
- Home Costs:
- Reimburse the cost of kilowatts used for recharging:
- You'll need the employee's home electricity bill showing the cost per kilowatt-hour paid by the employee for the period reimbursed.
- Reimburse the kilowatts and standing charges:
- Again you will need the employee's home electricity bill but showing both the standing charge and the cost per kilowatt-hour for the period reimbursed.
- Away Costs:
- You'll need a copy of the receipt for the recharge or the employee's/company's statement for the recharge showing:
- the unit cost of electricity; and
- any subscription/connection charges.
What you will need to use the calculator depends on whether you are reimbursing home or away recharging costs:
Home Costs:
Reimburse just the cost of kilowatts for recharging:
The employee's home electricity bill showing the cost per kilowatt-hour paid by the employee.
Reimburse the kilowatts and standing charge:
The employee's home electricity bill showing both the standing charge and the cost per kilowatt-hour for the period covered by the reimbursement.
Away Costs:
A copy of the charging receipt or the employee's/company's statement for the recharge showing:
- the unit cost of electricity; and
- any subscription/connection charges.
You'll need these documents as proof that the reimbursement rate you pay to your employee is just for the cost of electricity and doesn't include an element of profit (which would be liable to tax/National Insurance Contibutions).
Let's Get Started
Begin by selecting your electric company car and then scroll down and follow the instructions on screen for the details you need to supply.
Please make sure you press the 'Enter' key on your keyboard/device when you type a value into a box.