The HM Revenue and Customs (HMRC) has updated the advisory fuel rates (AFR) effective from 1 December 2024 to 28 February 2025. The advisory fuel rates for petrol, LPG, diesel, and electric cars are as follows:

 Petrol and LPG Rates

 Diesel Rates

 Electric Rates

• For electric cars, the rate per mile is 7 pence.

Key Notes

• Old rates may be used up to 1 month from the effective date of the new rates.
• These rates must only be used for company cars.
• Hybrid cars are treated as either petrol or diesel cars.

 When should advisory fuel rates be used?

Business Travel Reimbursements

1. Employers can use these rates to reimburse employees for fuel used on a company car for business purposes.
   
2. If the employer’s reimbursement rate is equal to or below the advisory rate, there will be no tax and Class 1A National Insurance to pay.
   
3. If the employer’s reimbursement rate exceeds the advisory rates and the employer cannot prove the fuel cost per mile is higher, the excess will be treated as taxable income and also subject to Class 1A National Insurance.
   

Private Travel Repayments

• These rates can also be used if employees are required to repay the cost of fuel used for private travel.
• To avoid a fuel benefit charge, employers must accurately track all private travel mileage and ensure employees reimburse the full cost of private fuel using the correct or higher rate. Advisory rates are not mandatory if employers can demonstrate that employees fully cover the cost of private fuel by repaying at a lower mileage rate.

 Employers may use their own rates if these better reflect specific circumstances, such as improved fuel efficiency of vehicles or higher business travel costs compared to the guideline rates.

 Click here to view the rates on the HMRC website.