Posted by jonathanfullarton - February 28, 2023 8:30 am
Advisory Fuel Rates
New Advisory Fuel Rates
The Government issues Advisory Fuel Rates each quarter. Advisory Fuel Rates apply only to employees using a company car. HMRC have advised that these rates should only be used when you either:
- reimburse employees for business travel in their company cars
- need employees to repay the cost of fuel used for private travel
You must not use these rates in any other circumstances.
Please read the latest rates below:
1 March 2023 Advisory Fuel Rates
New Advisory Fuel rates apply from 1 March 2023.
Please note that you can use the previous rates for up to one month from the date the new rates apply.
Petrol
| Engine size | Petrol – Advisory Fuel Rate | LPG – Advisory Fuel Rate |
| 1400cc or less | 13 pence | 10 pence |
| 1401cc to 2000cc | 15 pence | 11 pence |
| Over 2000cc | 23 pence | 17 pence |
Diesel
| Engine size | Diesel Advisory Fuel Rate |
| 1600cc or less | 13 pence |
| 1601cc – 2000cc | 15 pence |
| Over 2000cc | 20 pence |
Advisory Electricity Rate
The advisory fuel rate for fully electric cars will rise from 5 pence to 8 pence per mile from 1 March 2023. Thereafter the rate for electric vehicles will be reviewed every quarter in line with all Advisory Fuel Rates. Hybrid cars are treated as either petrol or diesel cars for this purpose.
Electricity is not a fuel for car benefit purposes.
You can use the previous rates for up to 1 month from the date any new rates apply.
For more information please visit the Gov.UK website.
Employee vehicles: Mileage Allowance Payments (MAPs)
Mileage Allowance Payments (MAPs) are payments made to employees who uses their own vehicle for business journeys. You can pay an employee a certain amount of MAPs each year without having to report the payment to HMRC. This is referred to as an ‘approved amount’.
Working out the approved amount
To calculate the ‘approved amount’, multiply your employee’s business travel miles for the year by the rate per mile for their vehicle. Further details can be found here.
Rates per business mile
| First 10,000 miles | Above 10,000 miles | |
|---|---|---|
| Cars and vans | 45p (40p before 2011 to 2012) | 25p |
| Motorcycles | 24p | 24p |
| Bikes | 20p | 20p |
Example:
Your employee travels 14,000 business miles in their car – the approved amount for the year would be £5,500 (10,000 x 45p plus 4,000 x 25p).
What to report and pay
You must:
- report on form P11D
- add anything over the ‘approved amount’ to the employee’s pay, and deduct and pay tax as you would normally do with other benefits
For previous Advisory Fuel Rates or for further information please visit the HMRC website. Or contact your local MFW office for more assistance.
