Update on Advisory Fuel Rates for Company Cars

The advisory fuel rates (AFRs) for company cars changed on 1 June 2024. These rates, updated quarterly to reflect fuel price fluctuations, determine how employers can reimburse employees for business travel in company cars without any income tax consequences.

New Rates Effective as of 1 June 2024:

  • Petrol Engines:
Engine Size  
1,400cc or less 14p
1,401cc to 2,000cc 16p
Over 2,000cc 26p

 

  • Diesel Engines:
Engine Size  
1,600cc or less 13p
1,601cc to 2,000cc 15p
Over 2,000cc 20p

 

  • LPG Engines: Rates have remained static.
Engine Size  
1,400cc or less 11p
1,401cc to 2,000cc 13p
Over 2,000cc 21p

 

  • Fully Electric Vehicles: The AFR will reduce to 8p per mile.
  • Hybrid cars are treated as either petrol or diesel for AFR purposes.

Transitional Period:

Although these rates became effective as of 1 June, employers can continue using the previous rates for one month. Employees using fully electric vehicles and driving high mileage in June might benefit from the last rate of 9p per mile. Conversely, those using diesel and petrol vehicles may find the new AFRs more advantageous.

For more detailed information, please refer to the linked resource below.

Advisory fuel rates – GOV.UK (www.gov.uk)