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  • Farrell & Farrell

HMRC company car advisory fuel rates from 1 December 2021

The HMRC company car advisory fuel rates that apply from 1 December 2021 have been increased reflecting a sharp increase in fuel prices over the last quarter.


These HMRC rates only apply to:

· reimburse employees for business travel in their company cars; or

· require employees to repay the cost of fuel used for private travel.


Please note that if the rates are used, it is not necessary to apply for a HMRC dispensation to cover the payments made.


Electric cars - The advisory electricity rate for fully electric cars has also increased to 5p per mile. Electricity is not a fuel for car fuel benefit purposes.


When employees are reimbursed up to the advisory fuel rates for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance arising.


Advisory fuel rates from 1 December 2021:-



Hybrid cars are treated as either petrol or diesel cars for this purpose.


HMRC reviews these rates quarterly.

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