HM Revenue & Customs (HMRC) has confirmed that a new 17p per mile advisory fuel rate is now in force for certain petrol drivers. The updated rates, effective from September 1, apply to company car users who need to reclaim fuel costs. Under the new scale, petrol vehicles with engine sizes up to 1400cc will see a rate of 14p per mile, while those with engines between 1401cc and 2000cc are set at 17p. For vehicles with engines over 2000cc, the rate rises to 27p per mile.
Quarterly updates and EV adjustments
These advisory fuel rates are reviewed quarterly by HMRC, covering petrol, diesel, and electric vehicles. The tax authority has also detailed how the rates for electric cars are calculated. According to HMRC, the Department for Energy Security and Net Zero annually publishes a 'pence per kilowatt hour' cost, which is then uprated by the Office for National Statistics' Consumer Prices Index for electricity to reflect quarterly price variations for EVs.
For fully electric cars, the value of the annual equivalent rate is calculated by taking the cost of electricity per mile for each model, as provided by the Department for Transport, combined with electricity price data from the Department for Energy Security and Net Zero and the Office for National Statistics. HMRC explains: "Based on company car sales data across the last 3 years, a weighted average value of the electrical costs per mile for a fully electric car is then calculated."
Public charging rate methodology
The public charging advisory electric rate for fully electric cars is derived using additional public charging price data from the Zapmap Price Index. HMRC states: "The method for calculating a public charging advisory electric rate is the same as the home charging advisory electric rate. The only change is the underlying price of electricity (in pence per kilowatt-hour), which is updated to reflect the average price of public charging using slow or fast chargers (charging speed less than 50 kilowatts)."
The 'slow or fast public charge cost per kilowatt-hour' is based on the Zapmap public charging price index monthly published figure for slow or fast chargers (charging speed less than 50 kilowatts), uprated with the latest estimate of electricity prices from the Office for National Statistics. For journeys where a company car is charged at both public and residential locations, HMRC advises that mileage can be apportioned based on how much charging happens at each place, ensuring the calculation is fair and reasonable.
