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Advisory Fuel Rates To Change From 1st September

Company car users will see an increase of between one and two pence per mile from 1st September 2022,  according to new rates announced by HMRC’s advisory fuel rates (AFR) office.

There will be a one pence rise for petrol vehicles under 2000cc and a two pence increase for vehicles above 2000cc in the advised fuel prices compared to the rates in June 2022.

The corresponding diesel vehicle rate increases by 1p for cars up to 2000cc and by 2p for vehicles above 2000cc, while the LPG cost remains the same with the exception of a 1p increase for vehicles over 2000cc.

Previous rates (effective June 2022) will be honoured for a grace period of one month after the implementation of the new rates.

Prices are applicable only under the following circumstances:

  • reimburse employees for business travel in their company cars; or
  • require employees to repay the cost of fuel used for private travel.

These fees are not transferable under any other conditions. A waiver is not required to make payments if the rates are utilised.

For completely electric vehicles, the advisory electricity rate has not changed from 5p per mile. For the purposes of car fuel benefits, electricity is not considered a fuel.

HMRC agrees that there is no taxable profit and no Class 1A national insurance to pay when workers are compensated for using their own cars for business trips.

New Advisory Fuel Rates From 1st September 2022

Petrol vehicles

Engine SizePetrol – amount per mileLPG – amount per mile
1400cc or less15p9p
1401cc to 2000cc18p11
Over 2000c27p17p

Diesel vehicles

Engine SizeDiesel – amount per mile
Up to 1600cc14p
1601cc to 2000cc17p
Over 2000cc22p

For this reason, hybrid vehicles are classified the same as regular petrol or diesel vehicles.

If you need any help or support with anything accountancy related, please get in touch with us at hello@bkplus.co.uk and our experts will be more than happy to assist you.

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