Fuel Charges and Advisory Fuel Rates

Fuel Charge

The Government fuel scale charge for calculating the tax due on employer-provided ‘free’ fuel for private use in a company car rises to £24,500 from April 6th 2020.

If your employer provides fuel for your private use this is a benefit to you and you will incur a tax charge.

This is calculated by multiplying £24,500 (a set amount irrespective of car driven) by the same % derived from the CO2 of your car, see above or table below. For example, a petrol car with CO2 emissions of 99 g/km has a tax charge of 23%. The fuel scale charge is £24,500 x 23% = £5,635, equating to annual fuel tax liability of £1,127 for a 20% tax payer, or £2,254 for a 40% tax payer.

If an employee reinburses their employer for private fuel they do not then pay the Benefit In Kind (BIK) Fuel Charge. The table below shows the Government Advisory Fuel Rates (AFR). The AFR should be used to calculate the amount to reimburse an employer for private fuel. Equally an employee can purchase all of the fuel used in their company car and use the AFR to calculate how much they should claim back from their employee for business mileage.

Advisory Fuel Rates

These rates apply from 1 September 2023. You can use the previous rates for up to one month from the date the new rates apply.

Advisory electricity company car mileage rate for fully electric cars is 10p per mile from September 1 2023.

Hybrid powered company car mileage rates

• Drivers of petrol/electric hybrid company cars should use the petrol rates.
• Drivers of diesel/electric hybrid cars should use the diesel rates.

These rates are only applicable to employees using a company car.