New HMRC advisory fuel rates (AFRs) can be used from 1 September 2023 benefiting company car drivers who need to reclaim fuel expenses from their employers.
Checking that the correct advisory fuel rate is used is important to ensure your mileage tax rebate claim is accurate.
The advisory electricity rate (AER), which is used to reimburse drivers of electric company cars, has been increased from 9 pence per mile (ppm) to 10 ppm. This change comes after the rate remained unchanged during the last quarterly review.
In March 2023 the AER was raised from 8ppm as HMRC modified the calculation method in order to more accurately reflect fuel prices.
There are also adjustments in the diesel AFR rates for different engine sizes. For company cars with an engine size over 2,000cc, the rate increases by 1 ppm – moving up from 18 ppm to 19 ppm.
The AFR remains at a steady 12 ppm for diesel cars up to 1,600cc and at a consistent rate of 14 ppm for diesel vehicles with an engine capacity ranging between 1,601-2,000cc.
Petrol company cars have two changes in rates with the AFR staying at its current value of 13 ppm for petrol vehicles up until 1,400cc.
Increases are implemented from 15 to 16 ppm for petrol company vehicles with engines ranging between 1,401-2,000 cc and 23 ppm to 25 ppm for petrol engines over 2000cc.
Hybrid cars are classified and taxed based on whether they operate on petrol or diesel fuel for AFR purposes.
The fuel rate for LPG vehicles up to 1,400cc remains unchanged at 10 ppm, while vehicles with an engine size of 1,401-2,000cc will be charged at a rate of 12 ppm. LPG vehicles with an engine capacity exceeding 2,000cc get a slight increase of 1ppm bringing the rate to 19 ppm.
