Mr Brown goes off to town on the 8:21….. or at least he would if the trains were running. So instead he drives his new electric car.
The car has a 280 mile range and he charges it overnight using a 7.5kwh “smart” home-charger at the equivalent of 3p per mile.
The town in question is Dundee and it’s a business journey. Mr Brown stops enroute and charges the car for the equivalent 15p per mile, using a super-charger.
He spends that night in a hotel and charges on-site for free!
Next day he drives home but stops off when his charge gets low to top it up to 80% of full charge at a more reasonable 11p per mile.
That night he plugs it in to charge but it only takes 80 miles worth to top it back up, and the next day it’s the weekend and it’s all private mileage (using the electrons that cost 11p a mile for the first 200 miles).
What should the pence per mile rate be to reimburse the business journey? 5p? 11p? 15p? Should his employer agree a blanket rate for everyone with HMRC?
The issue is that the rate could be anything from zero to 20p+ and will vary violently journey to journey. For some the AER at 5p will actually generate a profit.
We’d argue that the only way to get this right is to do it case by case. Is this the “new normal” – pence per mile isn’t going to work anymore?
So, he comes home every evening, and he’s ready for some fun (doing his expenses).