HMRC have published new advisory fuel rates for company car drivers which will apply from 1 March 2023.

This is a ‘At a glance’ guide to advisory fuel rates for company car drivers.

The new fuel rates are:

You can continue to use the old rates up to 31 March 2023, see below.

*Fully electric cars only

Advisory fuel rates are set by HMRC

• Employers can use these fuel rates to reimburse Company car drivers for business fuel.
• These fuel rates can also be used if employees are required to repay the cost of fuel used for private travel.
• These fuel rates should not be used in relation to vans.
• The electric rate will be reviewed quarterly from 1 March 2023.
• Hybrid cars can be treated as either petrol or diesel cars for this purpose.
• These amounts also apply for VAT purposes, but employers can only reclaim input VAT if the employee supplies a receipt.

On 1 December 2017, as part of the Taxation of employee expenses: Response to the call for evidence, the government announced it had considered the position and had no plans to change the current system; particularly it would not introduce specific rates for hybrid and electric cars.

However, in August 2018 HMRC announced that from 1 September 2018:

• They would accept that if employers pay up to four pence per mile when reimbursing employees for business travel in a fully electric company car there is no profit for Income Tax or earnings for National Insurance (NI) purposes.
• Employers can use their own rate if it better reflects circumstances, for example, if their cars are more efficient, or if the cost of business travel is higher than the guideline rate.
• If employers pay a rate that is higher than the advisory rate and cannot demonstrate the electricity cost per mile is higher, they must treat any excess as taxable profit and as earnings for Class 1 National Insurance purposes.

Rates from 1 December 2022

*Fully electric cars only

                                                                                                                                            Rates from 1 September 2022

*Fully electric cars only

Rates from 1 June 2022

*Fully electric cars only

Rates from 1 March 2022

*Fully electric cars only

Rates from 1 December 2021

*Fully electric cars only

Rates from 1 September 2021

*Fully electric cars only

Rates from 1 June 2021

*Fully electric cars only

Rates from 1 March 2021

*Fully electric cars only

If you have any questions, speak to the Robinsons Team