New fuel advisory rates for company car drivers

HMRC has published new advisory fuel rates for company car drivers, which will apply from 1 September 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 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 remains unchanged at 4p, however, electricity is not a fuel for car fuel benefit purposes
Engine size Petrol Diesel LPG Electric*
1,400cc or less 12p 7p 4p
1,600cc or less 10p 4p
1,401cc to 2,000cc 14p 8p 4p
1,601cc to 2,000cc 12p 4p
Over 2,000cc 20p 15p 12p 4p

*Fully electric cars only

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