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Advisory Fuel Rates for Company Cars

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New company car advisory fuel rates are reviewed every quarter, the latest have been published and took effect from 1 September 2022.

The rates only apply to employees using a company car. You must use the rates when you either; reimburse employees for business travel in their company cars or need employees to repay the cost of fuel used for private travel. You must not use these rates in any other circumstances.

The guidance states “If you pay rates that are higher than the advisory rates but cannot show the fuel cost per mile is higher, there will be no fuel benefit charge if the mileage payments are only for business travel. Instead, you’ll have to treat any excess as taxable profit and as earnings for Class 1 National Insurance purposes.”

It is also acceptable to use the previous rates for up to one month from the date the new rates apply.

The advisory fuel rates (per mile rounded to nearest whole penny) for journeys undertaken on or after 1 September 2022 are:

Petrol

Engine size        

1400cc or less: 15p

1401cc - 2000cc: 18p

Over 2000c: 27p

LPG

Engine size        

1400cc or less: 9p

1401cc - 2000cc: 11p

Over 2000cc: 17p

Diesel

Engine size        

1600cc or less: 14p

1601cc - 2000cc: 17p

Over 2000cc: 22p

 

The Advisory Electricity Rate for fully electric cars is 5pper mile. Electricity is not a fuel for car fuel benefit purposes. Hybrid cars are treated as either petrol or diesel cars for advisory fuel rates.

If you would like to discuss your company car policy, please contact us.

 

For full details visit: Gov.uk/FuelAR

For further information, please feel free to download the resource below:

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