HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 September 2023, increasing the rate for electric cars
The advisory fuel rates that apply from 1 September 2023 have increased by between 1p and 2p for larger size petrol engines, while diesel vehicle rate is up by 1p for 2000cc engines. There is a minimal increase in LPG engine rates compared with the September 2023 rates.
The previous rates, effective from June 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 September 2023 the advisory electricity rate for fully electric cars will increase to 10p pence per mile. 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 September 2023
|Engine size||Petrol – amount per mile (previous)||LPG – amount per mile (previous)|
|1400cc or less||13p (13p)||10p (10p)|
|1401cc to 2000cc||16p (15p)||12p (12p)|
|Over 2000cc||25p (23p)||19p (18p)|
|Engine size||Diesel – amount per mile (previous)|
|Up to 1600cc||12p (12p)|
|1601cc to 2000cc||14p (14p)|
|Over 2000cc||19p (18p)|
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.