New Fuel Rates for Company Cars Effective June 1: What You Need to Know

New Fuel Rates for Company Cars: What You Need to Know

Exciting news for company car users across the country – new fuel rates will be introduced from June 1st, covering electric, diesel, hybrid, petrol, and LPG vehicles. To shed some light on these changes, we spoke to car expert Darren Miller from BigWantsYourCar.com.

Advisory Fuel Rates: Managing Costs Effectively

Advisory Fuel Rates are a crucial tool in managing the expenses associated with company car usage. These rates, reviewed quarterly by HMRC, provide a standardised framework for reimbursing employees for business travel or calculating repayments for private fuel use.

“By aligning with these rates, employers can ensure compliance with tax regulations while also effectively managing company car expenses,” explains Darren.

Updated Rates Effective from June 1st

The updated Advisory Fuel Rates, effective from June 1st, bring significant changes to fuel reimbursement practices. Petrol cars will now have rates ranging from 14p to 26p per mile, while LPG cars will incur rates between 11p and 21p per mile. Diesel cars will have rates ranging from 13p to 20p per mile, categorised by engine size.

Hybrid vehicles, despite their fuel efficiency and environmental benefits, will still fall under the petrol or diesel rates based on the vehicle’s fuel type and engine size. This ensures consistency and compliance with tax regulations while accommodating the rise of hybrid technology in corporate fleets.

Transition to Electric Vehicles

One of the most significant changes is the introduction of an advisory electric rate for fully electric cars, set at 8p per mile. However, this rate has sparked concerns among drivers that it may not adequately cover all expenses, prompting calls for revisions to ensure fair compensation for all electric car users.

“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,” advises Darren.

With these new fuel rates coming into effect soon, it’s essential for company car users to stay informed and adjust their policies accordingly. By staying up-to-date with these changes, companies can ensure compliance with tax regulations while promoting sustainable and cost-effective transportation options for their employees.