The mileage rates for petrol, diesel, hybrid and electric cars

It's vital to closely watch mileage rates, because HMRC has set strict rates against which expenses are claimed for company cars. Here's what you need to know. What are the mileage rates for company cars and vans? An employee driving a company-owned vehicle on their own fuel is reimbursed by their employer using advisory fuel rates (AFRs). They apply to each mile driven on business but can also be used by employers to recoup the cost of private journeys driven using company fuel. The HMRC-approved per-mile rates are reviewed and, if necessary, adjusted every quarter so, to ensure they're not out of pocket, it's important that employees as well as employers keep up to date with them. Related articles HMRC publishes nine AFRs, with different rates for petrol, diesel and LPG-fuelled vehicles, each based on their engine capacity. They are calculated using a combination of average fuel efficiency figures for vehicles registered to fleets and current forecourt prices across the UK. The resulting figure is rounded to the nearest whole penny. Petrol cars and vans: Engine size Average Efficiency Cost per mile AFR Up to 1,400cc 49.5mpg 13.7p 14p 1,401-2,000cc  42.1mpg 16.2p 16p Over 2,000cc 26.7mpg 25.5p 26p Diesel cars and vans: ENGINE SIZE AVERAGE EFFICIENCY COST PER MILE AFR Up to 1,600cc 56.7mpg 12.6p 13p 1,601-2,000cc 48.0mpg 14.9p 15p Over 2,000cc 36.3mpg 19.7p 20p LPG cars and vans: ENGINE SIZE AVERAGE EFFICIENCY COST PER MILE AFR Up to 1,400cc 39.6mpg 11.3p 11p 1,401-2,000cc 33.7mpg 13.3p 13p Over 2,000cc 21.3mpg 21.0p 21p How do mileage rates work for electric and hybrid cars? Electricity is taxed differently from other fuels and HMRC has a much simpler system for reimbursing electric vehicle drivers. From 1 June 2024 the Advisory Electric Rate (AER) is 8p per mile for all electric cars, regardless of their size and efficiency. The rate is based on an average efficiency figure for all fleet-owned vehicles and the cost of home charging and, following a year of rising energy prices, is now adjusted every quarter. There are no mileage rates for hybrid cars, whether they’re ‘self-charging’ or plug-ins. Instead, HMRC advises fleets to reimburse drivers using the AFR system, with reference to the vehicle's engine size and primary fuel type. What if mileage rates don't cover real-world costs? HMRC will allow fleets to adjust the mileage rates if they are either leaving drivers out of pocket or actual travel costs are much lower; for example, if a plug-in hybrid is being charged regularly. However, they have to prove that the rates they are using are accurate and any excess can be taxed as additional income or profit.  Employers also don’t have to use AFRs if they can prove that employees reimburse them for the full cost of private journeys instead of calculating it based on mileage. Are there mileage rates I can claim for using my own car for business? HMRC issues more generous mileage rates for drivers who use their own car or van, as these are supposed to cover the cost of wear and tear to the vehicle as well as the fuel used. Called Mileage Allowance Payments, only a certain amount, called ‘approved amounts’, can be paid to employees each year without having to be reported to HMRC.