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Advisory fuel rates

Advisory fuel rates

Stuart Datlen

If you pay for the fuel used in your company car you are entitled to recover the cost of the fuel – for business journeys - based on agreed Advisory Fuel Rates (AFRs), from your employer.

There are separate rules when using a private vehicle for business journeys.

If the agreement with your employer is that you pay for all the fuel costs and that none can be recovered from the employer, then you can claim for the recorded business miles at agreed AFR rates as an expense claim on your tax return or by calling HMRC.

You can use the previous rates for up to 1 month from the date the new rates apply, the AFRs are updated quarterly to reflect changes in fuel prices. The rates from 1 March 2022 are:

Petrol LPG Diesel
1400cc or less 13p mile 1400cc or less 8p mile 1600cc or less 11p mile
1401 cc to 2000cc 15p per mile 1401cc to 2000cc 10p per mile 1601 to 2000cc 13p per mile
Over 2000cc 22p per mile Over 2000cc 15p per mile Over 2000cc 16p per mile

These AFRs can also be used to calculate the value of private fuel costs if your employer does pay for your private fuel.
Company car drivers and businesses should also be aware of the Car Fuel Benefit Charge. A cash payment to an employer to payback any private fuel provided can create overall cash savings. This might not apply to all company car drivers, but it is worth checking to see if a repayment is possible.
Alternatively, using electric cars as company cars are now proving to be tax efficient alternatives. You can find out more about this in our blog here.
For assistance with fuel rates or to evaluate your options please contact us.