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HMRC publishes new Advisory Fuel Rates

 Published 31st August 2021
General Guides  HMRC / Tax 

New Advisory Fuel Rates (AFRs) have been released by the government, effective from Wednesday 01 September. The rates impact those company car drivers claiming back fuel costs from their employer without attracting free fuel tax.

The new figures from HMRC have seen increases across the board for petrol and diesel rates, reflecting rising fuel prices.The Advisory Electricity Rate (AER) for plug-in electric cars has remained unchanged.

Petrol models have seen rates for all three engine size classifications rise by 1 ppm. Diesel rates have risen by 2ppm for models with engines greater than 2,000cc, and 1ppm for those vehicles with engines up to 1,600cc and from 1,601cc to 2,000cc. Hybrid vehicles are categorised as petrol or diesel models, based on their core fuel type.

AFRs are published at a pence per mile (PPM) rate and provide an advisory figure for reimbursing company car drivers for business mileage. They can also be used by drivers to reimburse employers for private mileage where all fuel is paid, avoiding paying free fuel tax.

The rates are regularly reviewed on a quarterly basis.

Current AFR Rates From 01 September 2021

Diesel (inc. hybrid): engine size (cc) Advisory Fuel Rate (AFR)
Up to 1,600cc 10 pence
1,601cc - 2,000 cc 12 pence
Over 2,000cc 15 pence

Petrol (inc. hybrid): engine size (cc) Advisory Fuel Rate (AFR)
Up to 1,400cc 12 pence
1,401cc - 2,000cc 14 pence
Over 2,000cc 20 pence

LPG: engine size (cc) Advisory Fuel Rate (AFR)
Up to 1,400cc 7 pence
1,401cc - 2,000cc 8 pence
Over 2,000cc 12 pence

Electric: fully-electric Advisory Fuel Rate (AFR)
All models 4 pence

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