Posted by James Pearson on 02 Sep 2024
Updates to Advisory Fuel Rates 2024
Fuel for Company Cars
When an employer provides an employee with a company car, they may also provide fuel for that car. Where that fuel is provided for private use, the employee has received a taxable benefit in kind. This benefit is calculated by multiplying a fixed figure (currently £27,880) by the percentage used in calculating the benefit for the company car itself.
This fuel benefit charge will not be due if the employee compensates the employer for all their private use of the car, and a simple way of doing this is for the employee to keep a record of his private mileage and use the advisory fuel rates to calculate the amount he pays to the employer.
The alternative option is for the employer to calculate the amount owed through keeping detailed records of the exact amount of fuel provided, the price paid for fuel at the pump each time the car is fuelled, the fuel consumption figure of the vehicle used, and the logs of private mileage. Given the complexity involved, employers normally opt to simply use the advisory fuel rates.
Business Fuel Rates
Sometimes the situation is reversed, and the employer does not provide fuel for use in the company car but compensates the employee for any business miles travelled. Such a payment would be taxable employment income for the employee if it exceeds the cost of the fuel used for business purpose. As above, the cost can be calculated through detailed record keeping of the exact cost of the fuel that has been used, but a simper route is to use the HMRC advisory fuel rates.
Fuel Rates for Private Cars
The advisory fuel rates only apply to company cars so should not be used to calculate payments relating to an employee’s private vehicle. The advisory fuel rate does not apply to vans either.
Advisory Fuel Rates
From 1 September 2024, the advisory fuel rates will be as follows. These rates are reviewed every 3 months.
|
Engine size |
Petrol – rate per mile |
LPG – rate per mile |
|
1400cc or less |
13p |
11p |
|
1401cc – 2000cc |
15p |
13p |
|
Over 2000cc |
24p |
21p |
| Engine size |
Diesel – rate per mile |
|
|
1600cc or less |
12p |
|
|
1601cc – 2000cc |
14p |
|
|
Over 2000cc |
18p |
Electric – 7p per mile
If you would like any advice regarding the above article or would simply like to discuss other ways in which we could help you or your business, please contact us on 01962 856 990 or customerservice@taxinnovations.com
Share With