New fuel advisory rates for company car drivers

HMRC has published new advisory fuel rates for company car drivers, which will apply from 1 December 2021. The new rates see an increase of 1p per mile for petrol and diesel vehicles with engines of 1400-2000cc and an increase of 2p per mile for petrol engines over 2000cc and a 1p increase for diesel engines over 2000cc.

These rates can be used by employers wishing to pay their employees the cost of fuel for business journeys in company cars (where the employee pays for all fuel costs), or where the employer pays for all fuel, for reimbursement of private mileage by company car drivers.

A few points to note:

  • These rates should be used in relation to cars, not vans
  • Hybrid cars can be treated as either petrol or diesel cars for this purpose
  • For fully electric cars, the advisory electricity rate has increased to 5p, however, electricity is not a fuel for car fuel benefit purposes
Engine size Petrol Diesel LPG Electric*
1,400cc or less 13p 9p 5p
1,600cc or less 11p 5p
1,401cc to 2,000cc 15p 10p 5p
1,601cc to 2,000cc 13p 5p
Over 2,000cc 22p 16p 15p 5p

*Fully electric cars only

If you’d like any further details, please do contact us and our tax team will be happy to help you.

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