HMRC advisory fuel rates for company car users from 1 June 2023

HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 June 2023, cutting diesel rates 

The advisory fuel rates that apply from 1 June 2023 have decreased by between 1p and 2p for all diesel engine sizes, while unleaded rates remain unchanged. There is a minimal increase in LPG engine rates compared with the March 2023 rates. 

The previous rates, effective from March 2023, can be used for up to one month from the date the new rates apply.

The rates only apply in the following circumstances:

• reimburse employees for business travel in their company cars; or
• require employees to repay the cost of fuel used for private travel.

These rates cannot be used in any other circumstances. If the rates are used, it is not necessary to apply for a dispensation to cover the payments made.

From 1 June 2023 the advisory electricity rate for fully electric cars remains at 9 pence per mile. In line with advisory fuel rates, this electric rate is now being reviewed quarterly.

When employees are reimbursed for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance to pay.

Advisory fuel rates from 1 June 2023

Engine size

Petrol - amount per mile (previous)

LPG - amount per mile (previous)

1400cc or less

13p (13p)

10p (10p)

1401cc to 2000cc

15p (15p)

12p (11p)

Over 2000cc

23p (23p)

18p (17p)

Engine size

Diesel - amount per mile (previous)

Up to 1600cc

12p (13p)

1601cc to 2000cc

14p (15p)

Over 2000cc

18p (20p)

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

HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.

If you have questions on issues surrounding employees who drive for work, visit BrAInbox today where you can find answers to questions like Do I have to pay employees for travel time?

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