News: HMRC Makes Changes to Company Cars

HMRC makes a major change impacting everyone who drives a company car.

Drivers of company cars have been alerted to significant HMRC changes that may affect their expense reimbursements. 

Starting in June, the Advisory Electricity Rate (AER) for electric cars has been reduced from 9p to 8p per mile, following a previous reduction in December.

As more companies transition to electric vehicles to reduce their carbon footprint, employees are advised to stay informed about these updates. The rate reduction may impact the amount drivers can claim for company car expenses. 

This decision has raised concerns about whether the current expenses accurately cover the costs incurred by electric car drivers.

Darren Miller from BigWantsYourCar.com commented, "The reimbursement rate for fully electric cars is now 8p per mile, a reduction of 2p since December 2023. This change raises concerns that the current AER policy is insufficient, leaving many drivers undercompensated. 

Significant revisions to the AER are necessary to ensure fair compensation for all affected drivers. Employers and employees should adjust to these changes and integrate the new electric rates into their reimbursement policies to promote eco-friendly transportation."

Meanwhile, the Advisory Fuel Rate for petrol and diesel company cars has increased by 2p and 1p per mile, respectively.