HMRC have updated the Advisory Fuel Rates for this quarter, with changes coming into effect from 1st December 2021.
These rates apply to employees using a company car for business travel and are to be used in the following circumstances:
Here are the changes to petrol, diesel, and LPG fuel rates, all of which have increased:
Petrol
- Up to 1400cc – 13p per mile (+1p)
- 1401 to 2000cc – 15p per mile (+1p)
- Over 2000cc – 22p per mile (+2p)
Diesel
- Up to 1600cc – 11p per mile (+1p)
- 1601 to 2000cc – 13p per mile (+1p)
- Over 2000cc – 16p per mile (+1p)
LPG
- Up to 1400cc – 9p per mile (+2p)
- 1401 to 2000cc – 10p per mile (+2p)
- Over 2000cc – 15p per mile (+3p)
Fully electric cars – 5p per mile (+1p)
Hybrid cars – use either petrol or diesel advisory fuel rates above
Previous rates: September’s advisory rates can still be used for 1 month following the date the new rates apply (1st Dec)
To read more information about how these rates are calculated and how to apply them, please follow this link.
It is important to ensure that employees are paid within the HMRC rates to avoid a tax charge arising. During an employer compliance inspection, one of the key checks conducted by HMRC relates to claims made for business travel – in company cars, as well as employees’ own vehicles, and HMRC make a significant amount of recoveries from employers who make excess rate payments.
If you would like any help in understanding how we can help you to minimise the risks of underpaying tax and NICs arising during HMRC Compliance Inspections, please contact our Employment Tax team.
