New company car advisory fuel rates have been published which take effect from 1 March 2021. The rates have increased by 1p per mile for petrol and diesel cars with an engine size of 1400-2000cc to reflect a slight increase in fuel prices.
HMRC reviews the advisory fuel rates quarterly on 1 March, 1 June, 1 September, and 1 December. The rates are based on the fuel type and engine size of the company car.
The fuel rates for journeys undertaken on or after 1 March 2021 are as follows:
|Engine size||Petrol – amount per mile|
|1400cc or less||10p|
|1401cc – 2000cc||12p|
|Engine size||LPG – amount per mile|
|1400cc or less||7p|
|1401cc – 2000cc||8p|
|Engine size||Diesel – amount per mile|
|1600cc or less||9p|
|1601cc – 2000cc||11p|
Hybrid cars are treated as either petrol or diesel cars for this purpose.
The advisory rate for fully electric cars is 4 pence per mile. Electricity is not a fuel for car fuel benefit purposes.
The rates apply when you either:
- reimburse employees for business travel in their company cars, or
- require employees to repay the cost of fuel used for private travel.
The previous rates, which were effective from 1 December 2020, can be used for up to one month from the date the new rates apply, so until 1 April 2021.
If you would like to discuss your car policy, please contact us.
Free initial consultation
Tax Director, Sheffield
0114 266 7141