HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 December 2021, increasing mileage rates by between 1p and 2p per mile for all petrol and diesel vehicles, while the electric car rate also increases
The advisory fuel rates that apply from 1 December 2021 have been increased by 1p per mile for petrol and diesel vehicles with engines of 1400-2000cc reflecting a sharp increase in fuel prices over the last quarter, while 2000cc petrol vehicles see a 2p increase to 22p per mile and diesel vehicles are up a penny to 16p per mile. The previous rates, effective September 2021, can be used for up to one month from the date the new rates apply.
The rates only apply in the following circumstances:
- reimburse employees for business travel in their company cars; or
- require employees to repay the cost of fuel used for private travel.
These rates cannot be used in any other circumstances. If the rates are used, it is not necessary to apply for a dispensation to cover the payments made.
