February 25, 2021

HMRC Advisory Fuel Rates

Advisory Fuel Rates from 1 March 2021

HM Revenue and Customs (HMRC) has updated its Advisory Fuel Rates (AFRs) from 1 March.

This quarter there are no changes to the LPG rates, but there are 1p increases for petrol and diesel categories. These are:

– Petrol vehicles between 1401cc and 2000cc where there is a 1p per mile increase in the rate from 11p to 12p per mile

– Petrol vehicles over 2000cc also see a 1p increase to 18p per mile

– Diesel vehicles with an engine of 1600cc or less increase from 8p to 9p per mile.

– Diesel vehicles in the category 1601cc to 2000cc also increase by 1p to 11p per mile.

The full rates can be seen in the table below.

The advisory electricity rate (AER) first introduced in September 2018 for plug-in electric cars remains unchanged at 4ppm.

The AFR changes are relevant as the company car advisory fuel rates are used by organisations to reimburse drivers for fuel used in incurring business, rather than private mileage. Companies can use the old rates for up to one month from the date the new rates apply.

The company car mileage reimbursement rates are based on current petrol and diesel prices from the Department for Energy and Climate Change, with the LPG taken from the UK average price from the AA website in the previous month.

In the absence of any specific rates for plug-in electric hybrid cars (PHEVs), they are treated as either petrol or diesel cars for this purpose.

Rates from 1 March 2021:

Engine sizePetrolLPG
1400cc or less10p7p
1401cc to 2000cc12p8p
Over 2000cc18p12p
Engine sizeDiesel
1600cc or less9p
1601cc to 2000cc11p
Over 2000cc12p

The previous rates which can be used for another month from the date the new rates apply, were:

Engine sizePetrolLPG
1400cc or less10p7p
1401cc to 2000cc11p8p
Over 2000cc17p12p
Engine sizeDiesel
1600cc or less8p
1601cc to 2000cc10p
Over 2000cc12p

Interested in Alternative Fuel Vehicles (AFVs)?

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