Petrol, diesel and electric vehicle drivers warned of new costs under huge HMRC rule changes
Drivers of petrol, diesel and electric vehicles could be impacted
PA
Drivers are being warned of new fuel rates that could impact their finances if they operate any vehicle through a company car scheme.
Advisory fuel rates are reviewed quarterly by HMRC and involve taking the average miles per gallon from manufacturers' information, as well as taking into account the annual sales to businesses.
These rates only apply to employees using a company car and can either be used to reimburse employees for business travel or if they need employees to repay the cost of fuel used for private travel.
Companies are able to adjust the mileage rates if they are costing drivers too much, although this needs to be proved, and any excess can be taxed as additional income.
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The new advisory fuel rates are active from June 1
REUTERSElectric vehicles will pay a flat AFR rate regardless of the efficiency of the vehicle or their size, with the rate being combined with the average rate of home charging.
Darren Miller, from BigWantsYourCar.com, said: "Coupled with the introduction of an advisory electric rate for fully electric cars, the updated Advisory Fuel Rates effective from June 1, 2024, mark a significant development in fuel reimbursement practices.
“Employers and employees should adapt to these changes and incorporate electric rates into their reimbursement policies to encourage the use of eco-friendly transportation solutions."
Electric vehicle owners will benefit from a 2p per mile cut compared to December 2023, while petrol and diesel rates have jumped by one pence since March 1.
Advisory fuel rates from June 1, 2024
Petrol
Engines up to 1,400cc - 14p
Between 1,401cc and 2,000cc - 16p
Over 2,000cc - 26p
Diesel
Engines up to 1,600cc - 13p
Between 1,601cc and 2,000cc - 15p
Over 2,000cc - 20p
LPG
Engines up to 1,400cc - 11p
Between 1,401cc and 2,000cc - 13p
Over 2,000cc - 21p
Electric
All EVs - 8p
Any hybrid vehicles are treated either as petrol or diesel vehicles for advisory fuel rates.
LATEST DEVELOPMENTS:
Hybrid vehicles count as either petrol or diesel, rather than electric
GETTYWhile there are fewer drivers using LPG as a fuel, they are given a 20 per cent lower rate than petrol because of its "lower volumetric energy density".
According to Auto-gas.net, there are around 110,000 vehicles in the UK that run on LPG down from a peak of 170,000 more than a decade ago.