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 £27,800 in tax year 23/24.

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 £27,800 (a set amount irrespective of car driven) by the same % derived from the CO2 of your car. For example, a petrol car with CO2 emissions of 99 g/km has a tax charge of 24%. The fuel scale charge is £27,800 x 24% = £6,672, equating to annual fuel tax liability of £1,334 for a 20% tax payer, or £2,668.80 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 December 2024. You can use the previous rates for up to one month from the date the new rates apply.

Engine size	Petrol – amount per mile	LPG – amount per mile	Engine size	Diesel –  Amount per mile
1400cc or less	12 pence	11 pence	1600cc or less	11 pence
1401cc to 2000cc	14 pence	13 pence	1601cc to 2000cc	13 pence
Over 2000cc	23 pence	21 pence	Over 2000cc	17 pence

Advisory electricity company car mileage rate for fully electric cars is 7p per mile from September 1 2024.

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.

Mileage Allowance Payments

Mileage Allowance Payments (MAPs) are what you pay your employee for using their own vehicle for business journeys.

You’re allowed to pay your employee a certain amount of MAPs each year without having to report them to HMRC. This is called an ‘approved amount’.

To calculate the ‘approved amount’, multiply your employee’s business travel miles for the year by the rate per mile for their vehicle.

Tax: rates per business mile

	First 10,000 miles	Above 10,000 miles
Cars and vans	45p (40p before 2011 to 2012)	25p
Motorcycles	24p	24p
Bikes	20p	20p

Example
Your employee travels 12,000 business miles in their car – the approved amount for the year would be £5,000 (10,000 x 45p plus 2,000 x 25p).

It does not matter if your employee uses more than one vehicle in a year – it’s all calculated together.