HMRC has introduced new advisory fuel rates, effective from 1 September 2024, impacting company-car drivers across the UK. These rates, which apply to petrol, diesel and electric vehicles, are used to either reimburse employees for business travel or to repay the cost of fuel used for private travel.
Notably, the rates for petrol engines have been reduced. For engines up to 1,400cc, the rate is now 13p per mile, down from the previous rate of 14p. Engines between 1,401cc and 2,000cc see a rate of 15p per mile, while those over 2,000cc are now at 24p per mile. Diesel engines have also seen reductions, with the rates set at 12p for engines up to 1,600cc, 14p for those between 1,601cc and 2,000cc, and 18p for engines over 2,000cc.
The rates for liquefied petroleum gas (LPG) vehicles remain unchanged, with up to 1,400cc engines at 11p, those between 1,401cc and 2,000cc at 13p, and engines over 2,000cc at 21p per mile.
Electric vehicle owners face a rate reduction as well, with the advisory rate now set at 7p per mile. Hybrid vehicles continue to be treated as either petrol or diesel, depending on their primary fuel source.
These changes come as the British Vehicle Rental and Leasing Association advises its members and their customers to seek out the best energy tariffs for home charging to optimise costs. The adjustments to the advisory fuel rates reflect ongoing shifts in fuel and energy costs, as well as vehicle efficiency improvements.
Businesses and employees alike should review these new rates to ensure they are accurately reimbursed for their travel expenses under the new HMRC guidelines.
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