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Advisory Fuel Rate for Company Cars

As the result of recent increases in petrol and diesel prices, HMRC has increased the advisory fuel rates that apply for the reimbursement of employees’ private fuel for their company cars. The same rates apply when the employer reimburses employees for fuel used for business journeys in their company car.

The new rates apply from 1 September 2021, but you can continue to use the previous rates for up to 1 month from the date the new rates apply.

Where there has been a change the previous rate is shown in brackets:

Engine Size Petrol Diesel LPG
1400cc or less 12p (11p)   7p
1600cc or less   10p (9p)  
1401cc to 2000cc 14p (13p)   8p 
1601 to 2000cc   12p (11p)  
Over 2000cc   20p (19p)  15p (13p)  12p

Fuel Rates

You can continue to use the previous rates for up to 1 month from the date the new rates apply. For wholly electric cars there is a 4p advisory rate.

However, hybrid cars use the equivalent petrol or diesel rate.

Employees who have all the fuel for their company car paid for should consider reimbursing their employer for private use to avoid a private fuel benefit being charged.

Considering an electric car?

If you have any queries, please contact us on 01865 921 150. Alternatively, you can email us at info@progressaccountants.com.

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