HMRC has released updated Advisory Fuel Rates (AFRs) for company cars, effective from March 1, 2025. The new rates reflect slight changes in the pence per mile (ppm) values for both diesel and petrol vehicles, while the advisory electricity rate (AER) for electric company cars remains unchanged.
Diesel Company Car AFRs
- For diesel cars, most of the AFRs remain unchanged, with one notable update. The rate for diesel vehicles with an engine size up to 1,600cc has increased by 1p, from 11ppm to 12ppm.
- Diesel cars with an engine size of 1,601-2,000cc and more than 2,000cc will continue to have rates of 13ppm and 17ppm, respectively, with no changes from the previous quarter.
Petrol Company Car AFRs
For petrol vehicles, the updates are slightly more varied. The AFR for petrol cars with engines ranging from 1,401-2,000cc has risen from 14ppm to 15ppm, reflecting a small increase.
- The rate for petrol cars with engines up to 1,400cc remains at 12ppm.
- The AFR for petrol cars with engines over 2,000cc stays at 23ppm.
Advisory Electricity Rate (AER)
The Advisory Electricity Rate (AER), which is used by electric company car drivers to claim fuel costs, remains unchanged at 7ppm. This rate is based on an electrical efficiency of 3.57 miles per kilowatt hour and a domestic electricity cost of 25.24 pence per kilowatt hour.
LPG Vehicle AFRs
Rates for LPG (Liquefied Petroleum Gas) vehicles also remain the same. The AFR for LPG vehicles are as follows:
- 11ppm for vehicles up to 1,400cc
- 13ppm for vehicles with an engine size of 1,401-2,000cc
- 21ppm for vehicles over 2,000cc
Hybrid Cars
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 March 1 2025