HMRC has published the latest advisory fuel rates (AFR) for employee using company car, with a further rise in the electric car rate from 1 March 2023. The rate has decreased by between 1p and 3p for all petrol, diesel and LPG engine sizes compare to December 2022 rates.
The rate is applicable only in the following situations:
- reimburse employees for business travel in their company car or
- need employees to repay the cost of fuel used for private travel
You must not use these rates in any other circumstances.
From 1 March 2023 the advisory electricity rate for fully electric cars will rise from 8 pence to 9 pence per mile.
When employees are reimbursed for business travel in their company cars at no higher than the advisory fuel rates, there will be no taxable profit and no Class1A National Insurance to pay.
Advisory fuel rates from 1 march 2023
| Engine size | Petrol – amount per mile (previous) | LPG – amount per mile (previous) |
| 1400cc or less | 13p (14p) | 10p (10p) |
| 1401cc to 2000cc | 15p (17p) | 11p (12p) |
| Over 2000cc | 23p (26p) | 17p (18p) |
| Engine size | |
| Up to 1600cc | 13p (14p) |
| 1601cc to 2000cc | 15p (17p) |
| Over 2000cc | 20p (22p) |
Hybrid cars are treated as either petrol or diesel cars for advisory fuel rates.
HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.
You can use the previous rates for up to 1 month from the date any new rates apply.
