As the result in recent increases in petrol and diesel prices HMRC has increased the advisory fuel rates that apply for the reimbursement of employees’ private fuel for their company cars. The same rates apply when the employer reimburses employees for fuel used for business journeys in their company car.
The new rates apply from 1 September 2021, but you can continue to use the previous rates for up to 1 month from the date the new rates apply.
Where there has been a change the previous rate is shown in brackets:
| Engine Size | Petrol | Diesel | LPG |
| 1400cc or less | 12p
(11p) |
7p | |
| 1600cc or less | 10p
(9p) |
||
| 1401cc to 2000cc | 14p
(13p) |
8p | |
| 1601 to 2000cc | 12p (11p) | ||
| Over 2000cc | 20p
(19p) |
15p
(13p) |
12p |
You can continue to use the previous rates for up to 1 month from the date the new rates apply. For wholly electric cars there is a 4p advisory rate.
However, hybrid cars use the equivalent petrol or diesel rate.
Employees who have all the fuel for their company car paid for should consider reimbursing their employer for private use to avoid a private fuel benefit being charged. Those who use their own car for work, may be able to claim tax relief on the approved mileage rate. This covers the cost of fuel as well as owning and running the vehicle.
Our experts at Beavis Morgan can ensure your tax affairs are as efficient as possible to fit your circumstances. In addition, we can look ahead to retirement and inheritance tax planning.
For more information and to discuss your tax affairs in further detail, contact your usual Beavis Morgan Partner or email info@beavismorgan.com.