New HM Revenue and Customs (HMRC) advisory fuel rates came into effect on September 1, affecting petrol and diesel drivers who use a company car. The rates will remain in force for the next three months until December 1.
HMRC updates its advisory fuel rates four times per year, with quarterly changes taking place at fixed dates at the beginning of March, June, September and December. The rates apply only to drivers who use a company car and are used 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
The latest update has seen some HMRC advisory fuel rates come down from September 1, but the changes depend on the 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 those with 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.
As for drivers of 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 from September 1.
How the 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. As for electric cars, rates from September 1 remain unchanged regardless of whether drivers use home or public charges for their company car. These remain at 7p per mile for home charging and 15p per mile for public charging.
Listed are the new advisory fuel rates in full for petrol, diesel, LPG and electric cars from September 1:
- Petrol cars: Engines up to 1400cc or less: 14p per mile (unchanged); Engines between 1401cc to 2000cc: 17p per mile (unchanged); Engines over 2000cc: 27p per mile (up from 26p per mile)
- Diesel cars: Engines up to 1600cc or less: 15p per mile (unchanged); Engines between 1601cc to 2000cc: 16p per mile (down from 17p per mile); Engines over 2000cc: 22p per mile (down from 23p per mile)
- LPG cars: Engines up to 1400cc or less: 11p per mile (unchanged); Engines between 1401cc to 2000cc: 13p per mile (unchanged); Engines over 2000cc: 20p per mile (down from 21p per mile)
- Electric cars: Home charger: 7p per mile (unchanged); Public charger: 15p per mile (unchanged)
