Advisory Fuel Rates (AFRs) for company car drivers in the UK

Advisory Fuel Rates (AFRs) allow company car drivers to work out how much to claim back from their firm to pay for refuelling their work vehicle.

AFRs – given as pence-per-mile figures – can also be used to reimburse your company for fuel you've used doing private journeys in your company car.

The UK Government releases updated AFRs four times a year, on March 1, June 1, September 1 and December 1. By issuing new figures regularly, His Majesty's Revenue and Customs (HMRC) can react reasonably promptly as fuel prices fluctuate.

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The most recent update to AFRs applies from September 1, 2024, although drivers and companies are allowed to use the previous relevant rate for up to a month from the date of each update. Here are the latest AFRs in full:

Petrol Advisory Fuel Rates

Up to 1400cc engine - 13p per mile

From 1401cc to 2000cc - 15p per mile

More than 2000cc - 24p per mile

Diesel Advisory Fuel Rates

Up to 1600cc engine - 12p per mile

From 1601cc to 2000cc - 14p per mile

More than 2000cc - 18p per mile

LPG Advisory Fuel Rates

Up to 1400cc engine - 11p per mile

From 1401cc to 2000cc - 13p per mile

More than 2000cc - 21p per mile

Electric car Advisory Fuel Rates

The rate for electric cars – which is called the Advisory Electric Rate (AER) – is now 7p per mile, down 1p from the previous update.

Read more: The best electric company cars

Which AFRs apply to hybrid and plug-in hybrid cars?

The relevant petrol or diesel rate is used for hybrid cars – including plug-in hybrids (PHEVs) – even though they use electricity and are often much more efficient than the non-hybrid equivalent.

However, the rates are advisory rather than compulsory (hence the name). If your employer can prove that the car you’re using is more economical than the Government's rates assume, it can pay you less than the AFR stipulates. 

Conversely, if you run a fleet car that is thirstier than the AFR rate, and your boss proves that to HMRC, you could end up with a payback rate above the AFR.

Nonetheless, most employers keep things simple by sticking to the AFR. Paying above the rate could lead to a business having to pay Class 1A National Insurance, with the excess payment being treated as taxable profit.

Read more: The best PHEV company cars

How are AFRs calculated?

HMRC works out what the AFR should be by taking the average cost of a litre of unleaded or diesel fuel, and crunching these numbers with the official average economy figures of new cars supplied to businesses, depending on engine size.

As for LPG, HMRC takes the average cost from the AA website and works out the advisory fuel rate, assuming that a car running LPG is roughly 20% less economical than a conventional equivalent (LPG is less energy-dense than petrol and diesel).

Once accurate fuel-per-mile costs are worked out for every fuel and engine-size category, these are rounded up or down to the nearest penny, which becomes the AFR.

Read more: Which fuel is best for a company car?

Do I claim the AFR if I use my own car for a business trip?

No, advisory fuel rates do not apply – you want the approved mileage allowance rate. That tends to be higher because it takes into account wear and tear on your vehicle as well as fuel costs.

Read more: Can I use my company car for private journeys?

How much should I pay back for private company car journeys?

Repaying the fuel used on a private journey is worked out by assuming the cost per mile is the same as it would be for a business trip. In short, the same AFR applies, in reverse (you pay your company, rather than it paying you).

Of course, there’s a way around all this: if your employer chooses to pay for all of your fuel. Some companies do that by agreement, but not all.

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