The amount that employees can be reimbursed for business travel in company cars changed from 1 September 2024. What are the new rates?
Advisory fuel rates for company cars are updated by HMRC on a quarterly basis due to fluctuations in fuel prices. The rates determine the amount that can be paid to an employee using a company car for business mileage, free from income tax. HMRC has published the advisory rates applicable from 1 September 2024. Note that the rates for diesel and petrol engines have decreased, whilst LPG rates have remained static.
The rates per mile are:
| Engine Size | Petrol | LPG |
|---|---|---|
| 1400cc or less | 13p | 11p |
| 1401cc to 2000cc | 15p | 13p |
| Over 2000cc | 24p | 21p |
| Engine Size | Diesel |
|---|---|
| 1600cc or less | 12p |
| 1601cc to 2000cc | 14p |
| Over 2000cc | 18p |
The rate for fully electric vehicles is also reduced to 7p per mile. Hybrid cars are treated as either petrol or diesel cars for the purposes of advisory fuel rates.
These rates apply from 1 September 2024, but you can still use the previous rates for one month from that date. If you have business mileage for September, you will be slightly better off by using the rates for the current quarter.
This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.