Advisory Fuel Rates for Company Cars
If you're reimbursing employees for business travel in their company cars at a set pence per mile rate, then you need to be aware of the latest advisory fuel rates.
Set quarterly by the government, advisory fuel rates are designed to reflect the typical cost of fuel when driving a company car.
How much tax company car drivers will pay on fuel costs depends on the mileage rate your business uses when processing expense claims:
- At advisory fuel rates, your employees won’t incur any tax liability;
- Below advisory fuel rates, they may be eligible for a tax rebate;
- Above advisory fuel rates, company car drivers may be liable for additional tax (unless they can explain why the cost is higher).
- Company car drivers can also reduce benefit-in-kind costs by paying back their private mileage.
The latest rates (1 March 2022 to 1 June 2022) are:
Engine size | Petrol – amount per mile | LPG – amount per mile |
Up to 1400cc | 13p | 8p |
1401cc to 2000cc | 15p | 10p |
Over 2000cc | 22p | 15p |
Engine size | Diesel – amount per mile |
Up to 1600cc | 11p |
1601cc to 2000cc | 13p |
Over 2000cc | 16p |
Hybrid cars are treated as either petrol or diesel cars for this purpose.
The Advisory Electric Rate for fully electric cars is 5 pence per mile.
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