Company Car Today

Company Car Today Toolbox

Advisory Fuel Rates (AFRs)

AFRs can be used to negotiate dispensations for mileage payments for business travel in company cars.

Advisory Fuel Rates (AFRs) from 1 December 2021

They are meant to reflect actual average fuel costs at the time they are set and save time for both employers and HMRC by setting out some figures that can be used in the majority of cases. They give employers more certainty about what the mileage rates that they choose to apply mean for tax and National Insurance contributions (NICs).

The rates apply where employers:

  • reimburse employees for business travel in their company cars
  • require employees to repay the cost of fuel used for private travel

The rates are advisory only.

These rates apply from 1 December 2021. You can use the previous rates (shown in brackets) for up to one month from the date the new rates apply.

Petrol & LPG rates

Engine Size (cc)Petrol – per mileLPG – per mile
1400cc or less13 pence (12p)9 pence (7p)
1401cc to 2000cc15 pence (14p)10 pence (8p)
Over 2000cc22 pence (20p)15 pence (12p)

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

Diesel rates

Engine Size (cc)Diesel – per mile
1600cc or less11 pence (10p)
1601cc to 2000cc13 pence (12p)
Over 2000cc16 pence (15p)

Advisory Electric Rates (AERs) from 1 December 2021

The current Advisory Electric Rate is 5p per mile