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:

PETROL  
Engine size Petrol – amount per mile
1400cc or less 10p
1401cc – 2000cc 12p
Over 2000cc 18p

 

LPG  
Engine size LPG – amount per mile
1400cc or less 7p
1401cc – 2000cc 8p
Over 2000cc 12p

 

DIESEL  
Engine size Diesel – amount per mile
1600cc or less 9p
1601cc – 2000cc 11p
Over 2000cc 12p

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

Craig Walker

Tax Director, Sheffield

0114 266 7141

[email protected]