Advisory Fuel Rates

01 June 2024

We originally published this post on advisory fuel rates on 1 September 2020 and updated it on 1 June 2024 for freshness, accuracy, and comprehensiveness.

If your employees use company cars, you need to act in accordance with HMRC’s advisory fuel rates:

  1. Reimbursement for Business Travel: Ensure you use the correct rates when reimbursing for business travel expenses.
  2. Private Travel Fuel Costs: When repaying fuel costs for private travel, adhere to the advisory rates.

By following these guidelines and paying no more than the advisory rates, you’ll enjoy these benefits:

  • No taxable profit.
  • No Class 1A National Insurance to pay.
  • No fuel benefit charge when correctly recording private travel mileage and using the correct rate (or higher) for fuel reimbursements.

HMRC reviews and updates these rates quarterly on 1 March, June, September, and December, so staying informed is crucial.

New fuel rates effective from 1 September are as follows:

Engine SizePetrolLPGDiesel
Amount per mile (in pence)
1400cc or less141113
1401cc to 1600cc161313
1601cc to 2000cc161315
Over 2000cc262120

The advisory electricity rate for fully electric cars is 8p per mile, and HMRC treats hybrid cars as either petrol or diesel cars.

Remember, you can use the previous rates for up to 1 month from the date the new rates apply.

Ensure compliance and save on costs with HMRC’s advisory fuel rates. If you have questions or need expert guidance, don’t hesitate to contact us today. Our team is here to assist you in making the most of these updated rates and ensuring smooth operations for your business.

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

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