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 Size | Petrol – amount per mile | LPG – amount per mile |
|---|---|---|
| 1400cc or less | 15p | 9p |
| 1401cc to 2000cc | 18p | 11 |
| Over 2000c | 27p | 17p |
Diesel vehicles
| Engine Size | Diesel – amount per mile |
|---|---|
| Up to 1600cc | 14p |
| 1601cc to 2000cc | 17p |
| Over 2000cc | 22p |
For this reason, hybrid vehicles are classified the same as regular petrol or diesel vehicles.
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