Updated fuel mileage rates for company car drivers

HMRC / Tax 

HMRC has updated the fuel rates for company car drivers, effective from 01 March 2021.

The new rates - called the Advisory Fuel Rates (AFRs) - are used to reimburse drivers for business mileage undertaken in their company cars, or where all fuel is paid for by the company then the rates can be used to reimburse private mileage and therefore avoid punitive fuel benefit tax.

The rates have risen for petrol cars above 1401cc and up to 2000cc in diesels, reflecting changes at the fuel pumps. In early January, the RAC reported that supermarket prices had risen by 2p per litre . Further rises are predicted as the price of crude oil starts to rebound on the prospects of an economic uplift as the world starts to move out of the coronavirus straightjacket.

Drivers of hybrid vehicles should use the appropriate petrol or diesel band, while the Advisory Electricity Rate remains at 4p per mile.

The current rates are below.

Petrol rates from March 2021

1400cc or less - 10 pence

1401cc to 2000cc - 12 pence (plus 1p)

Over 2000cc - 18 pence (plus 1p)

Diesel rates from March 2021

1600cc or less - 9 pence (plus 1p)

1601cc to 2000cc - 11 pence (plus 1p)

Over 2000cc - 12 pence

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