The latest new company car advisory fuel rates have been published by HMRC and will take effect from September 1st 2022. These new rates will see a rise in cost of anywhere between one and two pence per mile.
The changes announced by HMRC will apply to all company cars from September 2022, with some vehicle classes seeing a jump from the rates established in June 2022. Some of these changes include a one pence increase for all petrol vehicles with engines under 2,000cc and two pence for vehicles with engines in excess of 2,000cc.
Thankfully, there’s a one-month grace period for the rates brought in for June 2022, so these rates are valid for up to one month from the date of the new rates. These changed rates are only applicable in two scenarios:
• To reimburse staff for any business travel using a company car
• If employees repay the cost of fuel used for private travel
Outside of these scenarios, the rates cannot be used for company cars. If these rates are used, then companies don’t have to apply for any form of dispensation to cover payments made. If an employee is reimbursed for business travel using a company car, then HMRC accepts that there isn’t a taxable profit. Therefore, there isn’t any Class 1A national insurance to pay.
For electric vehicles, the advisory electricity rate is going to stay the same at five pence per mile. In terms of car fuel benefit purposes, electricity isn’t viewed as a form of fuel. Hybrid cars are viewed as either petrol vehicles or diesel vehicles depending on the type of hybrid car.
Below is a summary of the advisory fuel rates from September 1st 2022:
• 1,400cc engine or less: 15p (petrol), 9p (LPG)
• 1,401cc to 2,000cc: 18p (petrol), 11p (LPG)
• Over 2,000cc: 27p (petrol), 17p (LPG)
For diesel company cars, the new advisory fuel rates are:
• Up to 1,600cc: 14p
• 1,601 to 2,000cc: 17p
• Over 2,000cc: 22p
If you’d like to know more about how the advisory fuel rates might impact your business, get in touch with our experts at SRB Associates in Melton Mowbray today on 01664 503682.