the fastest and most convenient chargers usually cost twice as much as plugging in at home. For example, Ionity’s ultra-fast units cost almost four times more per unit than the UK domestic average – so it could be worth encouraging drivers to make a slight detour to keep a lid on costs. 

How do you incentivise PHEV drivers to plug in?

AFRs can also be problematic for PHEVs, which don’t have their own set of rates. Instead, drivers claim using the petrol or diesel rates, based on their engine capacity, and these are unlikely to reflect hybrid economy – let alone plug-in hybrid economy.

From 1 September 2022, the rates are as follows:

Petrol PHEVs Rated MPG AFR
Up to 1,400cc 51.9mpg 15p
1,401-2,000cc 44.1mpg 18p
Over 2,000cc 28.8mpg 27p
Diesel PHEVs Rated MPG AFR
Up to 1,600cc 60.7mpg 14p
1,601-2,000cc 49.8mpg 17p
Over 2,000cc 38.8mpg 22p

The good news for drivers is those rates should cover the cost of the fuel and electricity used. Unfortunately they can also be also generous enough that a driver could choose not to plug in at all, and still wouldn’t be out of pocket. A lot of PHEVs have large petrol engines and would be able to claim at 27p/mile, which would result in some hefty travel expenses. 

Although rates can be adjusted, it’s not a straightforward fix, as Association of Fleet Professionals chair, Paul Hollick, explains: “Generally, our advice is to use AFR rates as a minimum for PHEVs, otherwise employers need to track how many miles are done by each driver and vehicle on electric and on ICE power, which is extremely difficult and time consuming. 

“In fact, in most real world conditions, there is an argument for paying more than AFR, as most PHEVs will cost in excess of the current rate to run.”

So how do you encourage drivers to plug in?

There are some upsides to electricity getting a unique tax treatment, which can help keep costs down.

Home charging is vital for BEVs and especially PHEVs, as it’s the cheapest and most convenient way to top up. The UK government has stepped up funding for charge points in flats and rental properties, but recently stopped offering support for homeowners in single-occupancy properties (such as houses and bungalows). Employers can also pay to install chargers at drivers’ houses, without any tax implications. 



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