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Important Update: HMRC Revises Advisory Fuel Rates (AFRs) from 1st June 2024

In an update for businesses and employees alike, HMRC has revised the advisory fuel rates (AFRs) for company car drivers. These changes, effective from 1st June 2024, will impact all journeys where employees claim back fuel costs from their employer. It is essential for companies to stay informed about these updates to ensure compliance and accurate reimbursement processes.

Key Points of the Update:

  1. Revised AFRs: HMRC has updated the advisory fuel rates, which are reviewed quarterly. These rates are crucial for reimbursing employees for business travel in company cars.
  2. Applicability: The revised rates apply in two main scenarios:
    • When employers reimburse employees for business travel using company cars.
    • When employees are required to repay the cost of private travel in company cars.

Why This Matters:

For Employers:

Staying compliant with HMRC’s AFRs is critical to avoid any discrepancies. Accurate reimbursement ensures that employees are fairly compensated for their business travel expenses without overburdening the company’s finances.

For Employees:

Understanding the revised rates helps employees accurately claim their fuel expenses and ensures they are not out-of-pocket for business travel. It also clarifies their obligations when it comes to repaying costs for private travel.

Next Steps:

  1. Review and Adjust Policies: Employers should review their current reimbursement policies and adjust them according to the new AFRs.
  2. Communicate with Employees: Ensure that all employees are aware of the new rates and understand how to claim their expenses correctly.
  3. Stay Informed: Since these rates are reviewed quarterly, it is important to stay updated on any further changes to avoid non-compliance.

Updated Advisory Fuel Rates from 1 June 2024

The advisory fuel rates are worked out from the fuel prices in these tables.

Petrol

Engine size (cc)Mean MPGFuel price (per litre)Fuel price (per gallon)Rate per mileAdvisory fuel rate
Up to 140049.5149.5 pence679.8 pence13.7 pence14 pence
1401 to 200042.1149.5 pence679.8 pence16.2 pence16 pence
Over 200026.7149.5 pence679.8 pence25.5 pence26 pence

Diesel

Engine size (cc)Mean MPGFuel price (per litre)Fuel price (per gallon)Rate per mileAdvisory fuel rate
Up to 160056.7157.6 pence716.6 pence12.6 pence13 pence
1601 to 200048.0157.6 pence716.6 pence14.9 pence15 pence
Over 200036.3157.6 pence716.6 pence19.7 pence20 pence

LPG

Engine size (cc)Mean MPGFuel price (per litre)Fuel price (per gallon)Rate per mileAdvisory fuel rate
Up to 140039.698.3 pence446.9 pence11.3 pence11 pence
1401 to 200033.798.3 pence446.9 pence13.3 pence13 pence
Over 200021.398.3 pence446.9 pence21.0 pence21 pence

Electric

From 1 June 2024, the advisory electric rate for fully electric cars will be 8 pence per mile.

Hybrid cars are treated as either petrol or diesel cars for advisory fuel rates.

The advisory fuel rates for petrol, LPG and diesel cars are shown in these tables.

You can use the previous rates for up to 1 month from the date any new rates apply.

From 1 June 2024

Engine sizePetrol — rate per mileLPG — rate per mile
1400cc or less14 pence11 pence
1401cc to 2000cc16 pence13 pence
Over 2000cc26 pence21 pence
Engine sizeDiesel — rate per mile
1600cc or less13 pence
1601cc to 2000cc15 pence
Over 2000cc20 pence
Electric — rate per mile
8 pence

For detailed information on the revised rates and to see how they may affect your business, you can visit the official HMRC website.

HB Accountants are here to help you and your business. We keep businesses and invidiuals informed, keep you and or your business compliant. If you would like to speak to us about how we can help you or your business, get in touch with us on 01992 444466..


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