Back
New Advisory Fuel Rates for company cars as of December 2021
27 December 2021
If you are responsible for a fleet, you may be pleased know that Advisory Fuel Rates (AFRs) were recently increased by HM Revenue & Customers (HMRC) as of December 1 2021.
The changes are as follows:
Diesel company cars
- Pence per mile (PPM) for vehicles with an engine of more than 2,000cc increased by 1ppm from 15ppm to 16ppm.
- PPM for vehicles with an engine of 1,601-2,000cc increased by 1ppm to 13ppm.
- PPM for vehicles with an engine of up to 1,600cc increased by 1ppm to 11ppm.
Petrol company cars
- PPM for vehicles with an engine of more than 2,000cc increased by 2ppm to 22ppm.
- PPM for vehicles with an engine of 1,401-2,000cc increased by 1ppm to 15ppm
- PPM for vehicles with an engine of up to 1,400cc increased by 1ppm to 13ppm.
LPG-powered company cars
- LPG reimbursement rate for vehicles with an engine of more than 2,000cc increased by 3ppm to 15ppm.
- LPG reimbursement rate for vehicles with an engine of up to 1,400cc increased by 2ppm to 9ppm.
- LPG reimbursement rate for vehicles with an engine of 1,401-2,000cc increased by 2ppm to 10ppm.
Electric and hybrid company cars
- Advisory electricity rate (AER) increased by 1ppm to 5ppm.
- Hybrid cars are treated as either petrol or diesel cars for AFR purposes.
This year marks the first time the AER rate has changed since its introduction in 2018.
The British Vehicle Rental and Leasing Association (BVRLA) and Association of Fleet Professionals (AFP)welcomed this change.
BVRLA chief executive Gerry Keaney said, “The EV market is maturing and is no longer a niche. We need a mileage recompense rate that can adapt to energy prices and charging trends, so we are pleased to see HMRC respond so swiftly to the lobbying from AFP and BVRLA”.
AFP chair Paul Hollick added, “We very much welcome this move by HMRC. In truth, 5ppm is probably still too low – recent research among our members saw 6-7ppm mentioned as an appropriate rate – but it does represent an increase of 25% in one step, which is quite substantial.
“Importantly, it establishes the principle of revisiting and revising the AER rate as part of conversations between industry bodies and HMRC, which is an important development.”
Contract hire and fleet management
Marshall Leasing is a Bank of Ireland (UK) plc-owned business which offers a commercial and flexible approach to business contract hire, contract purchase, sale and leaseback for cars and LCVs fleets and management of purchased fleets.
If you would like to find out more about our contract hire and fleet management services, please get in touch with us at info@marshall-leasing.co.uk or by calling 01480 414541. Alternatively, please complete our contact form.
Back