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Advisory Fuel Rates from 1 March 2024

HMRC has cut advisory fuel rates for users of company cars which will apply from 1 March 2024.

Here’s a quick recap of what the rules are surrounding advisory fuel rates and that the new rates will be as of today.

 

What are advisory fuel rates?

They are rates published by HMRC that may be used for reimbursement of mileage driven by company car drivers.

The rates are, as the name suggests, not compulsory. Employers are free to calculate and use their own fuel mileage rates, using the exact prices paid at the pump and the fuel consumption figures for the vehicles used.

Provided they have kept sufficient records to show how it has been calculated and are able to demonstrate that the rate paid does no more than cover the cost of fuel, then there are no tax consequences if this is what the employer chooses to do.

The same rates may be used whether:

  • the employer initially pays for all fuel and the employee then reimburses the employer in respect of private mileage; or
  • the employee initially pays for all fuel and the employer then reimburses the employee in respect of business mileage.

There are separate rates for petrol, diesel, LPG and fully electric cars. For hybrid cars, employers should use the rate appropriate to the petrol/diesel engine of the car.

HMRC reviews the rates quarterly – in March, June, September and December and for one month from the date of each change, employers may choose to use either the previous or new rates.

 

How have the rates changed from 1 March 2024?

The advisory fuel rates that apply from 1 March 2024 have been cut by between 1p and 2p for petrol and diesel engines. There was a 1p increase in LPG engine rates for lower cc vehicles while rates were up by three pence per mile for 2000cc plus vehicles. The advisory electricity rate for fully electric cars remain unchanged at 9p per mile.

 

Advisory fuel rates from 1 March 2024

Engine SizePetrol – amount per mileLPG – amount per mile
1400cc or less13p (14p)11p (10p)
1401cc to 2000cc15p (16p)13p (12p)
Over 2000cc24p (26p)21p (18p)

 

Engine SizeDiesel – amount per mile
Up to 1600cc12p (13p)
1601cc to 2000cc14p (15p)
Over 2000cc19p (20p)

 

The previous rates (in brackets above) which are effective from December 2023, can be used up to 31 March 2024.

As always, if you need our help or advice get in touch at enquiries@cowgills.co.uk

Disclaimer

The information was correct at time of publishing but may now be out of date.

Tax
Posted by Cowgills
1st March, 2024
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