HMRC reduces fuel and electric rates for advice.
Exciting news for all our ‘Net Zero Club News Network’ members! HMRC has recently released new advisory fuel rates (AFRs) which bring reductions across the board for petrol- and diesel-engined cars. Even better, the rate for fully electric cars is also set to decrease from 1st September 2024.
These AFRs are used to reimburse employees for business travel in their company cars and will be effective from the 1st of September 2024. The rates are based on the latest petrol and diesel prices obtained from the Department for Energy Security and Net Zero (DESNZ).
All petrol and diesel rates have been reduced by 1 penny per mile, except for larger-engined petrol cars (over 2000cc) which see a 2p decrease to 24p per mile. However, the LPG rates, which are sourced from the AA, remain the same.
This reduction in AFRs follows a decline in petrol and diesel prices, making it even more cost-effective for employees to utilise their company cars for business travel.
The updated AFR tables are detailed below, with the previous rates shown in brackets:
| Engine size | Petrol – amount per mile | LPG – amount per mile |
|---|---|---|
| 1400cc or less | 13 pence (14p) | 11 pence (11p) |
| 1401cc to 2000cc | 15 pence (16p) | 13 pence (13p) |
| Over 2000cc | 24 pence (26p) | 21 pence (21p) |
| Engine size | Diesel – amount per mile |
|---|---|
| 1600cc or less | 12 pence (13p) |
| 1601cc to 2000cc | 14 pence (15p) |
| Over 2000cc | 18 pence (20p) |
Additionally, starting from the 1st of September 2024, the advisory electric rate (AER) for fully electric cars will be reduced to 7 pence per mile from the previous rate of 8 pence per mile. It’s a great incentive for those environmentally-conscious drivers who have made the switch to electric vehicles!
It’s important to note that hybrid cars are categorised as either petrol or diesel cars for AFR purposes. Also, the previous rates can still be utilised for up to one month from the date the new rates come into effect.
For a full list of all the rates and detailed tables on how to calculate them, you can view the information here. Stay updated and ensure you are maximising your benefits when it comes to business travel reimbursements!
