HMRC have updated the advisory fuel rates for this quarter, with changes coming into effect from 1st September 2023.

These rates apply to employees using a company car for business travel and are to be used in the following circumstances:

  • When reimbursing employees for business travel in their company cars
  • When employees need to repay the cost of fuel used for private travel

Here are the changes to petrol, diesel, electric and LPG fuel rates, some of which have changed. The most significant change is the increase in electric car rate which reflects the increase in the cost of electricity.

The new rates are as follows:


  • Up to 1400cc – 13p per mile (no change)
  • 1401 to 2000cc – 16p per mile (+1p)
  • Over 2000cc – 25p per mile (+2p)


  • Up to 1600cc – 12p per mile (no change)
  • 1601 to 2000cc – 14p per mile (no change)
  • Over 2000cc – 19p per mile (+1p)


  • Up to 1400cc – 10p per mile (no change)
  • 1401 to 2000cc – 12p per mile (no change)
  • Over 2000cc – 19p per mile (+1p)

Fully electric cars – 10p per mile (+1p)

Hybrid cars use either petrol or diesel advisory fuel rates above as appropriate. Previous rates: June 2023 advisory rates can be used for 1 month following the date the new rates apply (1st September 2023).

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 HMRC 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 number of recoveries from employers who make excess rate payments.

If you would like any help in understanding how PKF Smith Cooper can help you to minimise your risks of underpaid tax and NIC arising during HMRC Compliance Inspections, please contact our Employment Tax team.