New company car advisory fuel rates are reviewed every quarter, the latest have been published and took effect from 1 June 2024.
The New Advisory Fuel Rates
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 June 2024 are:
Petrol
Engine size
1400cc or less: 13.7p
1401cc - 2000cc: 16p
Over 2000c: 26p
LPG
Engine size
1400cc or less: 11p
1401cc - 2000cc: 13p
Over 2000cc: 21p
Diesel
Engine size
1600cc or less: 13p
1601cc - 2000cc: 15p
Over 2000cc: 20p
The Advisory Electricity Rate for fully electric cars is 8p per 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
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