The Government has announced the latest Advisory Fuel Rates (AFRs) taking effect on 1 March 2024.
Significant rate increases reflect the rise in energy costs, and stronger guidance has been released to ensure company car users are not unfairly penalised by the rapid fluctuations in the cost of travel.
Advisory fuel rates are just that, advisory, so your firm may choose to reclaim a lower cost for personal mileage if the vehicles are more efficient, or repay higher amounts if the costs increase more than the advisory rate allows.
It is necessary to illustrate that the costs have increased, otherwise any additional amount over the advisory rate is treated as taxable profit and earnings for Class 1 National Insurance Contributions.
What does private mileage cost in an electric company car?
Electric vehicle rates have increased to reflect higher energy costs. The EV rate remains with a mileage allowance of 9p per mile this quarter; hybrid cars continue to be treated as their equivalent petrol or diesel models, making a long-range plug-in hybrid such as the Toyota RAV4 or Suzuki Across with a 2.5-litre petrol engine particularly cost-effective when reclaiming mileage.
When employees are repaying private use, as long as private mileages are accurately logged higher amounts will not incur a fuel benefit charge. Likewise you do not need to adhere to the advisory rates if a lower payment will cover the private fuel use.
Find out more about AFRs in our guide to reclaiming business mileage here.
What are the current advisory fuel rates?
AFRs effective from 1 March 2024 are as follows:
Petrol Advisory Fuel Rates from 1 March 2024
| Engine capacity | Amount per mile | Change since 1 December 2023 |
| Below 1,400cc | 13 ppm | -1 pence |
| 1,401cc – 2,000cc | 15 ppm | -1 pence |
| Over 2,000cc | 24 ppm | -2 pence |
Diesel Advisory Fuel Rates from 1 March 2024
| Engine capacity | Amount per mile | Change since 1 December 2023 |
| Below 1,600cc | 12 ppm | -1 pence |
| 1,601cc – 2,000cc | 14 ppm | -1 pence |
| Over 2,000cc | 19 ppm | -1 pence |
LPG Advisory Fuel Rates from 1 March 2024
| Engine capacity | Amount per mile | Change since 1 December 2023 |
| Below 1,400cc | 11 ppm | +1 pence |
| 1,401cc – 2,000cc | 13 ppm | +1 pence |
| Over 2,000cc | 21 ppm | +3 pence |
Electric rate per mile from 1 March 2024
- The advisory fuel rate for electric car claims is 9 pence per mile for this quarter
The Advisory Fuel Rates applicable between 1 December 2023 and 29 February 2024 can still be applied to claims up to 31 March 2024.
The rates for petrol and diesel cars have decreased across the board, whereas LPG rates have increased, meaning claims paid for large petrol cars in particular will benefit from using the carried over rate during March 2024.
Advisory Fuel Rates 1 December 2023 to 29 February 2024
- A rate of 9p per mile for electric cars was introduced for this quarter
| Capacity | Petrol | Diesel | LPG |
| Small | 14 ppm | 13 ppm | 10 ppm |
| Medium | 16 ppm | 15 ppm | 12 ppm |
| Large (over 2.0-litre) | 26 ppm | 20 ppm | 18 ppm |
Hybrid cars should be treated as either petrol or diesel, as appropriate.
AFRs are reviewed quarterly. You can use the previous rates for up to a month from the date the new ones apply. Older rates are available on the HMRC website.
The next new announcement of Advisory Fuel Rates will be published on 1 June 2024.
