HMRC advisory fuel rates for company car users from 1 December 2023

HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 December 2023.

The advisory fuel rates that apply from 1 December 2023 have increased by 1p for engine sizes 1400cc or less and larger sized petrol engines over 2000cc, while diesel vehicle rate is up by 1p for all engines. There is no increase in LPG engine rates compared with the September 2023 rates.

The previous rates, effective from September 2023, can be used for up to one month from the date the new rates apply.

• The rates only apply in 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 rates cannot be used in any other circumstances. If the rates are used, it is not necessary to apply for a dispensation to cover the payments made.

From 1 December 2023 the advisory electricity rate for fully electric cars will be 9p per mile. In line with advisory fuel rates, this electric rate is now being reviewed quarterly.

When employees are reimbursed for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance to pay.

Advisory Fuel Rates from 1 December 2023

Hybrid cars are treated as either petrol or diesel cars for this purpose.

HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.

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