Advisory fuel rates have changed from quarter beginning 1 September 2023 for certain vehicles!
The rate for electric cars will be 10p per mile and hybrid cars are treated as petrol or diesel for these purposes. This further increase reflects the higher electricity costs faces by energy consumers throughout the country.
Advisory fuel rates are used in the following circumstances:
- to reimburse employees for business travel in their company cars; or
- to require employees to repay the cost of fuel used for private travel.
Further details are laid out below:
Advisory fuel rates from 1 September 2023:
|Engine size||Petrol — rate per mile||LPG — rate per mile|
|1400cc or less||13 pence||10 pence|
|1401cc to 2000cc||16 pence||12 pence|
|Over 2000cc||25 pence||19 pence|
|Engine size||Diesel — rate per mile|
|1600cc or less||12 pence|
|1601cc to 2000cc||14 pence|
|Over 2000cc||19 pence|
Advisory fuel rates are reviewed quarterly, and so long as these rates are used, there is no requirement for businesses to apply for a dispensation to cover payments made, nor will there be any Class 1A national insurance contributions due on any amount paid over to employees for reimbursement for business travel in company cars.
For more information on fuel rates for company cars, please see https://www.gov.uk/guidance/advisory-fuel-rates
If you have any questions regarding your company car or any other TAX queries, please contact the IN Team