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Posted Mon, 27 Jun 2022 09:52:16 GMT by Stephen McGarry
I'm aware there are a couple of questions about the AFR for EV being only 5p per mile - frankly this is not enough to cover the actual cost of electricity. Anyway, my question for advice is about the AFR and its "advisory" status, and what this means for employers - specifically in my case the NHS versus all the other mileage reimbursement rates and various tax implicatons. How do employers (employees) vary this as it seems like the language being advisory, invites alternative rates? One angle of enquiry is the definition of "company car" versus what the NHS offer under "lease car schemes" - both the manager Lease car scheme, and Salary Sacrifice. My employer interpret the 5p AFR as the "limit" and basically say this is all that is "tax free" so anything paid over this for Salary Sacrifice (up to the 45p) is taxable. For the Lease car scheme, its worse, they flat refuse to pay any more than the 5p per mile. However, as I pay for my car lease (there is a contribution, but I pay most of the lease cost) does this mean it is not actually a "company car" for the purpose of the use of AFR ? Further, what if my lease car includes 0 (zero) business miles on its contract - ie. I am not receiving any AMAP payments in advance for business miles - if I then do some incidental mileage, is this still capped by the AFR? (and what if the lease does include AMAP based on say 1000 mile per year - is it different?) I kind of think the AFR is meant to be used for "Company Cars" in the more old fashioned sense of the word when the company give you a car that costs you nothing...
Posted Wed, 29 Jun 2022 11:48:34 GMT by HMRC Admin 10
The guidance regarding AFR is here:
Advisory fuel rates
We can't comment further on this forum as we deal with Income Tax and Self Assessment queries, we can't comment on employers.
You can see the definition of what is classed as a company car for the benefit charge here :
The benefits code: car and car fuel benefit

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