Advisory fuel rates 2024

HMRC has announced the revised advisory fuel rates (AFR), applicable from 1 September 2024 until 1 December 2024. The rates apply to company cars and differ based on engine size and fuel type.

We are keeping this article up to date with the AFR revisions throughout 2024, which will next happen in December.

Petrol and LPG advisory fuel rates per mile from 1 September 2024

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Diesel and electric advisory fuel rates per mile from 1 September 2024

Petrol and LPG advisory fuel rates per mile from 1 June 2024 to 31 August 2024

Diesel and electric advisory fuel rates per mile from 1 June 2024 to 31 August 2024

Petrol and LPG advisory fuel rates per mile from 1 March 2024 to 31 May 2024

Diesel and electric advisory fuel rates per mile from 1 March 2024 to 31 May 2024

Compared to the last revision from 1 June 2024, the advisory fuel rates for petrol cars have decreased, with 1p per mile for all engine sizes up to 2000cc and 2p for engines over 2000cc. The rates for diesel cars have also decreased by 1p for engines up to 2000cc and by 2p for engines over 2000cc.

For LPGs, the fuel rates have remained the same.

The electric car advisory fuel rate has decreased by 1p and is now 7p per mile.

Advisory fuel rates for electric cars

The current advisory fuel rate for electric cars (from 1 September 2024 until 1 December 2024) is 7 pence per mile. If you drive an electric car, you might also want to familiarise yourself with the mileage rates for electric cars in 2024. 

HMRC advisory fuel rates 2024 changes

HMRC revises the AFRs every four months to take into account changes in fuel and electricity costs, as well as the vehicles businesses purchase. The revisions happen each year on the following dates:

• 1 March
• 1 June
• 1 September, and
• 1 December.

Using the HMRC advisory fuel rates in 2024

The AFRs apply only to company cars, not personal vehicles used for business purposes. They can be used by:

• Employers when they reimburse employees for business-related driving using a company car and
• Employees when they reimburse employers for using a company vehicle for private travel.

Do you have to use the set advisory fuel rates?

You can consider the advisory fuel rates set by HMRC as a guideline - they don't have to be used. If, for example, your company car consumes more fuel than the AFR would cover, both employees and employers can be reimbursed at a higher rate so long as the employer can prove the car consumes more fuel. The same logic applies to using fuel rates lower than the advisory ones for economical cars.

AFR for employers

If your employees cover the fuel cost for company car use during business activities, you must reimburse them accordingly. Reimbursement up to or at the advisory fuel rate per mile is non-taxable for employees and doesn't incur National Insurance contributions.

If you reimburse employees at a higher rate than the AFR, you will have to substantiate this higher reimbursement with the actual fuel costs per mile of the company cars you provide. Otherwise, any excess over the HMRC advisory fuel rates will be taxed as a part of employees' income, including NI contributions.

AFR for employees

If you use a company car for private travel, where the company covers the fuel expenses, you must either reimburse the company for the fuel used at the advisory fuel rate or declare the personal use of the company car as a taxable benefit. This benefit incurs income tax and National Insurance contributions.

You must keep a record of the private miles you drive to avoid listing the private use of a company car as a taxable benefit. You can then compensate your employer for the recorded private miles at or higher than the applicable advisory fuel rate, depending on the car's fuel efficiency. If the company car is even more efficient, the advisory fuel rates don’t have to be used as long as your employer can prove that you have covered the total fuel cost for private miles at a lower rate.