New HM Revenue and Customs (HMRC) advisory fuel rates for company car drivers took effect on September 1, bringing changes to mileage charges for petrol and diesel vehicles. The rates will remain in force for three months until December 1, when they will be updated again.
HMRC adjusts its advisory fuel rates four times a year, with quarterly updates scheduled at the beginning of March, June, September and December. The rates apply only to drivers who use a company car, serving to reimburse employees for business travel in a company car or to repay the cost of fuel used for private travel.
Petrol and Diesel Rate Changes
In the latest update, some HMRC advisory fuel rates have come down from September 1, but the changes depend on engine size and fuel type. For drivers of petrol company cars with an engine size over 2000cc, rates have increased by 1p to 27p per mile. For smaller petrol engine sizes up to 1400cc or less and engines between 1401cc to 2000cc, rates remain unchanged at 14p per mile and 17p per mile respectively.
For diesel company cars, rates have gone down by 1p for engine sizes between 1601cc to 2000cc, dropping from 17p per mile to 16p per mile from September 1, while rates for engines over 2000cc have gone from 23p per mile to 22p per mile. For diesel engine sizes of 1600cc or less, rates remain unchanged at 15p per mile.
How Rates Are Calculated
To set the new rates from September 1, HMRC takes the latest petrol and diesel prices from the Department for Energy Security and Net Zero (DESNZ). HMRC said the rates per mile are rounded to one decimal place, but the final advisory fuel rates are rounded to the nearest whole penny.
Rates per mile which end in 0.5 are rounded down to the nearest whole penny for the advisory fuel rate when the underlying unrounded figure ends in a number less than 0.5. When the underlying unrounded figure ends in a number greater than 0.5, it is rounded up to the nearest whole penny.
LPG and Electric Car Rates
LPG rates for cars with larger engines of over 2000cc have also changed, going down by 1p from 21p per mile to 20p per mile, while rates for smaller engine sizes remain the same. For electric cars, rates from September 1 remain unchanged regardless of whether drivers use home or public charges for their company car, staying at 7p per mile for home charging and 15p per mile for public charging.
The full new advisory fuel rates from September 1 are as follows: petrol cars with engines up to 1400cc or less remain at 14p per mile, engines between 1401cc to 2000cc remain at 17p per mile, and engines over 2000cc rise to 27p per mile. Diesel cars with engines up to 1600cc or less remain at 15p per mile, engines between 1601cc to 2000cc drop to 16p per mile, and engines over 2000cc drop to 22p per mile. LPG cars with engines up to 1400cc or less remain at 11p per mile, engines between 1401cc to 2000cc remain at 13p per mile, and engines over 2000cc drop to 20p per mile. Electric cars remain at 7p per mile for home charging and 15p per mile for public charging.
