HMRC Advisory Fuel Rates

Company Cars, HMRC, News,

HMRC has published the latest advisory fuel rates (AFR) for company car users, which are effective from 1st June 2022. The increase ranging from one to three pence per mile is in response to soaring fuel prices.

These rates replace those issued in March 2022, which can be used up to the 1st July, one month after the new rates apply. HMRC will review rates again for 1st September onwards, with the usual review dates being 1st March, 1st June, 1st September and 1st December.

HMRC Advisory Fuel Rates ONLY apply in the following circumstances:

  • When reimbursing employees for business travel in their company cars.
  • If you require employees to repay the cost of fuel used for private travel.

Using these rates means it’s unnecessary to apply for a dispensation for the payments made. 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.

Fully electric cars advisory electricity rate remains unchanged at five pence per mile. Electricity is not classed as a fuel for car fuel benefit purposes. Hybrid cars are treated as either petrol or diesel cars for this purpose.

Advisory Fuel Rates – 1st June 2022

Engine sizePetrol – amount per mile (previous)LPG – amount per mile (previous)
1400cc or less14p (13p)9p (8p)
1401cc to 2000cc17p (15p)11p (10p)
Over 2000cc25p (22p)16p (15p)
Engine sizeDiesel – amount per mile
1600cc or less13p (11p)
1601cc to 2000cc16p (13p)
Over 2000cc19p (16p)

If you’re considering a Company Car, or are unsure of the best way to finance a vehicle for your business, why not take a look at the Company Car section of our Information Centre? There are articles in there that may help you get to grips with the implications, or get in touch to talk through the most suitable option for your circumstances.

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