NewsHMRC Advisory Fuel Rates AFR for company cars

Advisory Fuel Rates (AFR) for company car users from 1st September 2022

Table of Contents

Overview of Advisory Fuel Rates (AFR)

HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 September 2022, increasing rates between 1p and 3p, due to soaring fuel prices. 

The advisory fuel rates that apply from 1 September 2022 have been increased for some classes of vehicles from the June 2022 rates with a one pence increase on petrol vehicles under 2000cc and two pence for vehicles over 2000cc. 

The equivalent diesel vehicle rate goes up one pence for vehicles under 2000cc and 3p for over 2000cc from 19p to 22p, while LPG rates remain unchanged except for a one pence rise for vehicles over 2000cc.

The previous rates, effective June 2022, can be used for up to one month from the date the new rates apply.

When are Advisory Fuel rates (AFR) applied?

The rates only apply in the following circumstances:

  • reimburse employees for business travel in their company cars; or
  • require employees to repay the cost of fuel used for private travel.

These rates cannot be used in any other circumstances. If the rates are used, it is not necessary to apply for a dispensation to cover the payments made.

When employees are reimbursed for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance to pay.

Advisory Fuel rates (AFR) for electricity cars

The advisory electricity rate for fully electric cars is unchanged at 5p per mile. Electricity is not a fuel for car fuel benefit purposes.

Advisory fuel rates from 1 September 2022

Engine size

Petrol – amount per mile (Previous)

LPG – amount per mile (Previous)

1400cc or less

15p (14pm)

9p (9p)

1401cc to 2000cc

18p (17p)

11p (11p)

Over 2000cc

27p (25p)

17p (16p)

Engine size

Diesel – amount per mile (Previous)

1600cc or less

14p (13p)

1601cc to 2000cc

17p (16p)

Over 2000cc

22p (19p)

Hybrid cars are treated as either petrol or diesel cars for this purpose.

HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.

Advisory fuel rates
Advisory fuel rates

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