The HMRC-approved amount that employers can reimburse staff for business travel in company cars changes from 1 December 2023. What are the new rates?
The advisory fuel rates published by HMRC set fixed amounts that can be paid to an employee using a company car for business mileage, without income tax consequences. It’s possible to use a higher rate, but you must show that the actual fuel cost per mile is greater than the advisory rates.
HMRC has now published the advisory rates applicable from 1 December 2023, with a 1p increase for all diesel car users.
The rates per mile will be:
| Engine Size | Petrol | LPG |
| 1400cc or less | 14p | 10p |
| 1,401cc to 2,000cc | 16p | 12p |
| Over 2,000cc | 26p | 18p |
| Engine Size | Diesel |
| 1600cc or less | 13p |
| 1601cc to 2000cc | 15p |
| Over 2000cc | 20p |
The rate for electric vehicles has dropped to 9p. These rates apply from 1 December 2023, but you can still use the previous rates for one month from that date. For a full list of current and historic rates, click here.
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.