Advisory fuel rates for company cars

Feb 28, 2024
Author: Craig Walker
company car fuel rates

HMRC has published new advisory fuel rates for company car users which take effect from 1 March 2024.

The new rates reflect a reduction of 1p per mile for most petrol and diesel engine cars compared to the previous quarter.  Petrol cars with an engine size over 2000cc have seen a higher reduction of 2p per mile.  Whereas the mileage rate for LPG cars has increased by 1p to 3p (depending on the engine size)

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 2024 are as follows:

PETROL  
Engine size Petrol – amount per mile (previous)
1400cc or less 13p (14p)
1401cc – 2000cc 15p (16p)
Over 2000cc 24p (26p)

 

LPG  
Engine size LPG – amount per mile (previous)
1400cc or less 11p (10p)
1401cc – 2000cc 13p (12p)
Over 2000cc 21p (18p)

 

DIESEL  
Engine size Diesel – amount per mile (previous)
1600cc or less 12p (13p)
1601cc – 2000cc 14p (15p)
Over 2000cc 19p (20p)

 

Hybrid cars are treated as either petrol or diesel cars for this purpose.

The advisory fuel rate for fully electric cars from 1 March is 9 pence per mile, the same as the previous quarter. 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 2023, can be used for up to one month from the date the new rates apply, so until 1 April 2024.

If you would like to discuss your car policy, please contact us.

Free initial meeting

Craig Walker

Tax Director, Sheffield

cw@hawsons.co.uk