HMRC advisory fuel rates for company car users from 1 December 2022

HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 December 2022.

The previous rates, effective September 2022, can be used for up to one month from the date the new rates apply.

The rates only apply in the following circumstances:

• reimburse employees for business travel in their company cars; or
• require employees to repay the cost of fuel used for private travel.

These rates cannot be used in any other circumstances. If the rates are used, it is not necessary to apply for a dispensation to cover the payments made.

The advisory electricity rate for fully electric cars will rise from 5p to 8p per mile. In line with advisory fuel rates, this electric rate will also be reviewed quarterly from 1 December 2022. Electricity is not a fuel for car fuel benefit purposes.

When employees are reimbursed for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance to pay.

From 1 December 2022

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

HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.

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