HMRC has announced new Advisory Fuel Rates (AFRs) for company cars, effective from December 1, 2024. These rates determine the pence-per-mile (ppm) reimbursement employees can claim for business mileage in company vehicles. The update includes reductions in rates for both diesel and petrol vehicles, while rates for electric and LPG vehicles remain unchanged.
Diesel Vehicles:
- Over 2,000cc: Reduced from 18ppm to 17ppm.
- 1,601–2,000cc: Reduced from 14ppm to 13ppm.
- Up to 1,600cc: Reduced from 12ppm to 11ppm.
Petrol Vehicles:
- Up to 1,400cc: Reduced from 13ppm to 12ppm.
- 1,401–2,000cc: Reduced from 15ppm to 14ppm.
- Over 2,000cc: Reduced from 24ppm to 23ppm.
Electrical Vehicles:
The Advisory Electricity Rate (AER) remains unchanged at 7ppm, allowing electric company car drivers to continue claiming reimbursement at the same rate.
LPG Vehicles:
Rates remain steady at 11ppm (up to 1,400cc), 13ppm (1,401–2,000cc), and 21ppm (over 2,000cc).
Hybrid vehicles continue to be classified as either petrol or diesel for AFR purposes. These updates provide employers with revised guidance on reimbursing employees for fuel costs while reflecting current market trends in fuel prices.
Employers should ensure these new rates are implemented for claims starting December 1, 2024