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Advisory Fuel Rates 2024
27 March 2024 - 2 min read

Advisory fuel rates 2024

HMRC has announced the revised advisory fuel rates (AFR), applicable from 1 March 2024 until 1 June 2024. The rates apply to company cars and differ based on engine size and fuel type.

We will keep this article up to date with the AFR revisions throughout 2024, which will be in June, September, and December.

Petrol and LPG advisory fuel rates per mile from March 2024

Engine size (cc) Petrol LPG
Up to 1400 13p 11p
1401 - 2000 15p 13p
Over 2000 24p 21p
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Diesel and electric advisory fuel rates per mile from March 2024

Engine size (cc) Diesel Electric
Up to 1600 12p 9p
1601 - 2000 14p 9p
Over 2000 19p 9p

Compared to the last revision from 1 December 2023, the advisory fuel rates have decreased for petrol cars, with 1p per mile for all engine sizes up to 2000cc and 2p for engines over 2000cc. The rates for diesel cars have also decreased by 1p for all engine sizes.

The fuel rates have increased for LPGs, with a pence per mile for engines up to 2000cc and 3 pence per mile for engines over 2000cc.

The electric car advisory fuel rate has remained the same at 9p per mile.

Advisory fuel rates for electric cars

The advisory fuel rate for electric cars from 1 March 2024 until 1 June 2024 is 9 pence per mile.

HMRC advisory fuel rates 2024 changes

HMRC revises the AFRs every four months to take into account changes in fuel and electricity costs, as well as the vehicles businesses purchase. The revisions happen each year on the following dates:

  • 1 March
  • 1 June
  • 1 September, and
  • 1 December.

Using the HMRC advisory fuel rates in 2024

The AFRs apply only to company cars, not personal vehicles used for business purposes. They can be used by:

  • Employers when they reimburse employees for business-related driving using a company car and
  • Employees when they reimburse employers for using a company vehicle for private travel.

Do you have to use the set advisory fuel rates?

You can consider the advisory fuel rates set by HMRC as a guideline - they don't have to be used. If, for example, your company car consumes more fuel than the AFR would cover, both employees and employers can be reimbursed at a higher rate so long as the employer can prove the car consumes more fuel. The same logic applies to using fuel rates lower than the advisory ones for economical cars.

AFR for employers

If your employees cover the fuel cost for company car use during business activities, you must reimburse them accordingly. Reimbursement up to or at the advisory fuel rate per mile is non-taxable for employees and doesn't incur National Insurance contributions.

If you reimburse employees at a higher rate than the AFR, you will have to substantiate this higher reimbursement with the actual fuel costs per mile of the company cars you provide. Otherwise, any excess over the HMRC advisory fuel rates will be taxed as a part of employees' income, including NI contributions.

AFR for employees

If you use a company car for private travel, where the company covers the fuel expenses, you must either reimburse the company for the fuel used at the advisory fuel rate or declare the personal use of the company car as a taxable benefit. This benefit incurs income tax and National Insurance contributions.

You must keep a record of the private miles you drive to avoid listing the private use of a company car as a taxable benefit. You can then compensate your employer for the recorded private miles at or higher than the applicable advisory fuel rate, depending on the car's fuel efficiency. If the company car is even more efficient, the advisory fuel rates don’t have to be used as long as your employer can prove that you have covered the total fuel cost for private miles at a lower rate.

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