HMRC advisory fuel rates for company car users from 1 December 2023

HMRC advisory fuel rates for company car users from 1 December 2023

Dec 8, 2023

HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 December 2023, increasing diesel rates

The advisory fuel rates that apply from 1 December 2023 have increased by 1p for some sizes of petrol engines, while diesel vehicle rates are up by 1p for all engine sizes. There is a 1p decrease in LPG engine rates for 2000cc plus vehicles compared with the September 2023 rates while the electric rate is cut.

The previous rates, effective from September 2023, can be used for up to one month from the date the new rates apply.

The rates only apply in the following circumstances:

  • reimburse employees for business travel in their company cars; or
  • require employees to repay the cost of fuel used for private travel.

These rates cannot be used in any other circumstances. If the rates are used, it is not necessary to apply for a dispensation to cover the payments made.

From 1 December 2023 the advisory electricity rate for fully electric cars will be 9p per mile, down from 10p last quarter. In line with advisory fuel rates, this electric rate is now being reviewed quarterly.

When employees are reimbursed for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance to pay.

Advisory fuel rates from 1 December 2023

Engine size Petrol – amount per mile (previous) LPG – amount per mileĀ (previous)
1400cc or less 14p (13p) 10p (10p)
1401cc to 2000cc 16p (16p) 12p (12p)
Over 2000cc 26p (25p) 18p (19p)

 

Engine size Diesel – amount per mile (previous)
Up to 1600cc 13p (12p)
1601cc to 2000cc 15p (14p)
Over 2000cc 20p (19p)

Hybrid cars are treated as either petrol or diesel cars for this purpose.

HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.