Advisory Fuel Rates from 1 March 2024

HMRC has cut advisory fuel rates for users of company cars which will apply from 1 March 2024.

Here’s a quick recap of what the rules are surrounding advisory fuel rates and what the new rates will be as of today.

 

What are advisory fuel rates?

They are rates published by HMRC that may be used for reimbursement of mileage driven by company car drivers.

The rates are, as the name suggests, not compulsory. Employers are free to calculate and use their own fuel mileage rates, using the exact prices paid at the pump and the fuel consumption figures for the vehicles used.

Provided they have kept sufficient records to show how it has been calculated and are able to demonstrate that the rate paid does no more than cover the cost of fuel, then there are no tax consequences if this is what the employer chooses to do.

The same rates may be used whether:

  • the employer initially pays for all fuel and the employee then reimburses the employer in respect of private mileage; or
  • the employee initially pays for all fuel and the employer then reimburses the employee in respect of business mileage.

There are separate rates for petrol, diesel, LPG and fully electric cars. For hybrid cars, employers should use the rate appropriate to the petrol/diesel engine of the car.

HMRC reviews the rates quarterly – in March, June, September and December and for one month from the date of each change, employers may choose to use either the previous or new rates.

 

How have the rates changed from 1 March 2024?

The advisory fuel rates that apply from 1 March 2024 have been cut by between 1p and 2p for petrol and diesel engines. There was a 1p increase in LPG engine rates for lower cc vehicles while rates were up by three pence per mile for 2000cc plus vehicles. The advisory electricity rate for fully electric cars remain unchanged at 9p per mile.

 

Advisory fuel rates from 1 March 2024

 Engine Size Petrol – amount per mile LPG – amount per mile

 1400cc or less

 13p (14p) 11p (10p)

 1401cc to 2000cc

 15p (16p) 13p (12p)

 Over 2000cc

 24p (26p) 21p (18p)

 

 Engine Size Diesel – amount per mile

 Up to 1600cc

 12p (13p)

 1601cc to 2000cc

 14p (15p)

 Over 2000cc

 19p (20p)

 

The previous rates (in brackets above) which are effective from December 2023, can be used up to 31 March 2024.

As always, if you need our help or advice get in touch at hello@chw-accounting.co.uk


This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.

DID YOU FIND THIS USEFUL?

Share it with your network:  

Want more great content?
Sign up to our newsletter

    Follow us

    Tweets by @CHW-accounting

    CHW-Accounting
    @chw-accounting


    Twitter: chw_accounting

    WHAT'S THE NEWS?

    Grab a biscuit and a brew and read our latest news.

    8 March 2024

    CHW Spring Budget report

    by

    Chancellor Jeremy Hunt presented his 2024 budget this week. A 2p cut to National Insurance, a new tax on vaping and an increase to the salary…


    Read more >

    4 March 2024

    Enhanced powers for Companies House to tackle fraud

    by

    The Economic Crime and Corporate Transparency Act (ECCT) passed into law in October 2023. The Act makes far-reaching changes to UK company law which will have…


    Read more >

    1 March 2024

    Advisory Fuel Rates from 1 March 2024

    by

    HMRC has cut advisory fuel rates for users of company cars which will apply from 1 March 2024. Here’s a quick recap of what the rules…


    Read more >

    1 March 2024

    Payrolling of benefits in kind to become mandatory

    by

    Last month, HMRC announced that from April 2026, the reporting and paying of Income Tax and Class 1A National Insurance on benefits in kind (BIK) via…


    Read more >

    19 February 2024

    Tax changes – What’s new in 2024?

    by

    We are now well and truly into 2024 and before you know it the end of the 2023/24 tax year on 5 April will be upon…


    Read more >

    YOUR CHALLENGES

    No matter what your challenge is, we’ve probably dealt with it before.



    Need an Accountant?

    Get in touch >


    Need an Accountant?

    Get in touch >


    Tax issues?

    Find out more >


    Tax issues?

    Find out more >


    Trying to grow your business?

    We can help >


    Trying to grow your business?

    We can help >


    Managing cashflow?

    We can help >


    Managing cashflow?

    We can help >


    Starting a business?

    We can help >


    Starting a business?

    We can help >


    Looking for funding?

    Need help with funding? >


    Looking for funding?

    Need help with funding? >


    Buying or selling a business?

    We can help >


    Buying or selling a business?

    We can help >


    Adopt the cloud?

    We can help >


    Adopt the cloud?

    We can help >


    What else can we do for you?

    We can help >


    What else can we do for you?

    We can help >
    CONTACT US

    Get in touch, no hard sell, just a brew, a biscuit and a chat.