TL;DR
EV drivers lose £1,000+ yearly due to low reimbursement rates. Paua offers a calculator and HMRC-compliant tool to ensure fair compensation for business mileage
· Electric vehicle drivers are losing out on fair compensationfor business mileage due to low Government reimbursement rates, with someunderpaid by over £1,000 annually.
· Analysis and insight from Paua highlights that drivers who rely on public charging face the biggest gaps.
· To address this, Paua offers a calculator to estimate compensation shortfalls and has developed Paua Reimburse, a tool to ensure accurate, HMRC-compliant reimbursement for business miles.
· Paua’s calculator aims to help businesses and business drivers better understand and address the costs of driving electric miles
· Paua encourages affected businesses and business drivers to contact them for better support from employers to manage this complex area.
Electric Vehicle Business drivers are out of pocket by hundreds of pounds a year when relying on Government reimbursement rates
New analysis from Paua finds that electric vehicle drivers could be undercompensated by£1,000 a year or more in some cases.
Businesses have a choice when they compensate their electric vehicle drivers for their business miles; pay them a fair rate or pay them the Government’s advisory electricity rate (AER).
The problem with the AER is that it massively undercompensates drivers as soon as they leave their home driveway.
A driverdoing as little as 20% of their charging in public can be faced with a gap of £200or more for their annual cost to drive business miles. Higher mileage driversand those who charge away from home are most effected.
A Polestar 2driver doing 6,000 business miles a year, charging mainly in public stands to be out of pocket by £800 every year. And a Jaguar iPace doing 10,000 miles for business all in public stands to be out of pocket by in excess of £2,000
Some businesses chose to address this with an additional payment to the driver. This additional payment needs to be “grossed up” in order to be compliant. This means adding extra PAYE tax and income tax to the amount which is an additional fiddle for the business. Businesses who do not do this are not compliant and risk HMRC penalties of tens of thousands of pounds.
Or a business can choose to just pay for the charging. However, with no record of what business miles the driver does this is a benefit in kind and without recording it as such the business is again not tax compliant.
To help tackle this challenge Paua has released a simple calculator (https://www.paua.com/reimburse-calculator) to enable drivers to understand how much out of pocket they are. Inputting data around their vehicle, their mileage and energy costs provides the drivers with a snapshot of the impact that this has on them.
Paua is urging drivers who feel that they may be affected by this to reach out hello@pauatech.com so that Paua can work with their employer to get them a better deal.
Paua developed Paua Reimburse to tackle this exact challenge. Paua Reimburse captures the charging costs for home and public and splits the business and personal usage to help businesses fairly compensate their employees for the amount they actually spent on charging their vehicle for business use.
The data collected ensures that Paua can calculate a bespoke rate for the driver fortheir claim period.
Niall Riddell, CEO at Paua stated “Paua makes it simple for business to properlycompensate employees and be compliant with HMRC.”
Paua is encouraging drivers to check their reimbursement status by visiting www.paua.com and using the calculator to reviewtheir position with their employer.
Riddell goes on “Businesses are pushing drivers to adopt electric vehicles but without the right compensation mechanisms in place they risk underpaying their drivers forthe business miles they complete. This can leave them in a sticky situation.”
Businesses who want to find out more can contact Paua directly for a consultation to review the best approach available to them.
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