Advisory Fuel Rates – MUST Be Effective 01 October 2023

The Advisory Fuel Rates (AFRs) have had their quarterly review and HMRC published revised rates from 01 September 2023. With rising fuel prices again, it’s not surprising there were changes – mainly for cars with a higher cc. The following rates are effective 01 September 2023 but HMRC say the old rates can be used for one month from this date. So, from 01 October 2023 you must be using the following rates (with the old rates in brackets and * indicating where there’s been a change):

Petrol (or hybrid) Rate
1400cc or less 13p (13p)
1401 to 2000cc 16p (15p) *
Over 2000cc 25p (23p) *
LPG Rate
1400cc or less 10p (10p)
1401 to 2000cc 12p (12p)
Over 2000cc 19p (18p) *
Diesel Rate
1600cc or less 12p (12p)
1601 to 2000cc 14p (14p)
Over 2000cc 19p (18p) *

The Advisory Electricity Rate for fully-electric cars increased from 9p per mile to 10p.

There are important points worth repeating about these rates:

  • They relate to mileage in company The rates for business mileage in private cars are at the (higher) Approved Mileage Allowance Payments (AMAPs)
  • They are the rate of reimbursement to employees for business travel OR the rates used to calculate amounts employees should repay when they are required to make good the cost of any private travel
  • Where you reimburse (or ask for repayment) at higher rates there’s a tax and National Insurance liability unless you can justify the fuel cost per mile is higher

The last point is important and if you do use rates greater than HMRC’s rates, you need to be able to demonstrate and justify why. Maybe fuel costs in your area are higher than HMRC’s UK average ones. It’s all about justifying which means more records to keep!

 

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