HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 September 2022, increasing rates between one and two pence per mile. Please note that these rates only apply for employees who have a company car but where fuel is not paid in full by the employer.
Unfortunately, no change has been made in rates to the mileage payment due to employees who use their own vehicles for work. This is a pity as the rate of 45p a mile has been unchanged for many years and of course the price of petrol has increased dramatically.
The advisory fuel rates that apply from 1 September 2022 have been increased for some classes of vehicles from the June 2022 rates with a one pence increase on petrol vehicles under 2000cc and two pence for vehicles over 2000cc.
The equivalent diesel vehicle rate goes up one penny for vehicles under 2000cc and 2p for over 2000cc, while LPG rates remain unchanged except for a one pence rise for vehicles over 2000cc.
The previous rates, effective June 2022, 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.
The advisory electricity rate for fully electric cars remains at 5p per mile. Electricity is not a fuel for car fuel benefit purposes.
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 2022
|Engine size||Petrol – amount per mile (previous)||LPG – amount per mile (previous)|
|1400cc or less||15p (14p)||9p (9p)|
|1401cc to 2000cc||18p (17p)||11p (11p)|
|Over 2000cc||27p (25p)||17p (16p)|
|Engine size||Diesel – amount per mile|
|Up to 1600cc||14p (13p)|
|1601cc to 2000cc||17p (16p)|
|Over 2000cc||22p (22p)|
Hybrid cars are treated as either petrol or diesel cars for this purpose.