Advisory Fuel Rates

01 September 2022

This post on advisory fuel rates was originally published on 1 September 2020 and was updated on 1 September 2022 for freshness, accuracy and comprehensiveness.

If you have an employee using a company car, you will be required to use the HMRC’s advisory fuel rates when:

  • reimbursing them for business travel or,
  • repaying them the cost of fuel used for private travel.

If the rate you pay is no higher than the advisory fuel rates, there will be no taxable profit and no Class 1A National Insurance to pay.

There will also be no fuel benefit charge if you correctly record all private travel mileage and use the correct rate (or higher) to determine how much your employees must repay you for fuel used for private travel.

The rates are reviewed quarterly and updated on 1 March, June, September and December.

The new fuel rates for use from 1 September are as follows:

Engine SizePetrolLPGDiesel
Amount per mile (in pence)
1400cc or less15914
1401cc to 1600cc181114
1601cc to 2000cc181117
Over 2000cc271722

The advisory electricity rate for fully electric cars is 5p per mile, and hybrid cars are treated as either petrol or diesel cars.

You can use the previous rates for up to 1 month from the date the new rates apply.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Author
Jo Simpson MCIPPdip,Payroll Manager
Advisory Fuel Rates for employee company cars

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