HMRC issues new rates to affect petrol, diesel, and electric car drivers this month

HMRC is set to introduce new advisory fuel rates (AFRs) this month as part of its regular quarterly update. While the changes will mean some people can claim more money back, electric vehicle owners are facing an entirely new set of rules. AFRs are utilised by those who have a company car and require reimbursement for business travel, or need to cover the cost of fuel used for private journeys in the company vehicle.

These rates are refreshed every quarter to reflect changes in fuel costs. Each rate is determined based on engine size, average miles per gallon and electricity cost per kilowatt-hour.

In a first, electric vehicle owners will now encounter two distinct rates depending on whether they used a public charger or charged their vehicle at home from September 1. This change has been implemented due to varying prices depending on where vehicles are charged.

The calculation method for a public charging advisory electric rate remains the same as the home charging advisory electric rate.

The only alteration is the underlying price of electricity, which has been updated to mirror the average price of public charging using slow or fast chargers.

As of September 1, there have been no changes in the rates for petrol engines, with up to 1,400cc at 12p, between 1,401cc and 2,000cc at 14p, and over 2,000cc at 22p. Diesel engines have seen a slight increase, with up to 1,600cc rising by 1p to 12p, between 1,601cc and 2,000cc remaining unchanged at 13p, and over 2,000cc increasing by 1p to 18p.

The rates for Liquefied Petroleum Gas (LPG) engines remain the same, with engines up to 1,400cc at 11p, between 1,401cc and 2,000cc at 13p, and over 2,000cc at 21p. For electric vehicles, the rate for home chargers is 8p and for public chargers it's 14p.

Previously, all fully electric vehicles had the same AFR of 7p, a rate that has remained unchanged since last September. These electric charger rates apply only to fully electric vehicles.

Hybrid vehicles are treated as either petrol or diesel engines depending on their fuel type alongside the electric intake. The next AFR update will be on December 1.

The full list of new rates can be found on the Gov.uk website.