bars

Tax Questions: Advisory Fuel Rate Changes in June

fuel rate

Advisory fuel rates for company cars changes this June.

Advisory Fuel Rates (AFRs) and Advisory Electricity Rates (AERs) can be used by employers to calculate fuel costs for tax purposes. They may apply to company cars when an employee is required to repay the cost of fuel used for private travel or when the company reimburses an employee for business mileage.

Increased road fuel prices have recently been recalculated by HMRC and there are some significant increases from 1 June 2022 to report. The table below shows suggested reimbursement rates for employees’ private mileage using a company car.

Provided any private fuel is fully reimbursed, the employee will not be taxed on the fuel benefit and there is no class 1A employers NIC. Where the employer doesn’t pay for any fuel for the company car, these are the amounts that can be reimbursed in respect of business journeys from 1 June 2022.

Engine SizePetrolDieselLPG
1400cc or less14p (13p)   9p (8p)
1600cc or less 13p (11p) 
1401cc to 2000cc17p (15p) 11p (10p)
1601 to 2000cc 16p (13p) 
Over 2000cc25p (22p)19p (16p)16p (15p)

Where there has been a change, the previous rate is shown in brackets above. Note that for hybrid cars you must use the petrol or diesel rate. The advisory electricity rate for fully electric cars is 5 pence per mile. You can continue to use the previous rates for up to 1 month from the date the new rates apply.

Check out the government website for further information:

Advisory fuel rates – GOV.UK (www.gov.uk).

Let’s Talk

For help calculating your company tax get in touch on let’s talk.

Sign up to our News and Updates

Cookies

By clicking OK you are agreeing to the terms set out in our Cookies Policy and Privacy Policy.

Cookie Policy » Privacy Policy »

OK