HMRC has bumped up its Advisory Electricity Rate for company car drivers as it also publishes Advisory Fuel Rates for the new quarter.

HMRC has bumped up its Advisory Electricity Rate for company car drivers as it also publishes Advisory Fuel Rates for the new quarter.

The new rates, used for reimbursing employees’ costs while driving a company car on business, are effective from 1 September 2023 and include a boost to the Advisory Electricity Rate (AER) from 9ppm to 10ppm.

First launched in 2018 at 4ppm, the AER had risen to 5p in December 2022 and 8p on 1 March 2023 but was kept static in the Q2 review. The rise will bring some relief to drivers but latest AA figures indicate that all drivers using public charging will still be out of pocket on the new rate; some quite considerably.

HMRC has also reflected rising fuel costs with several increases in the Advisory Fuel Rates (AFRs) for the new quarter. These include a 1p increase to 16ppm for cars with midsize petrol engines (1401cc to 2000cc) and a 2p rise to 25ppm for larger petrol engines (over 2000cc). The AFR for diesel cars with larger engines has also increased 1p to 19ppm, with a similar move for larger LPG-engined cars.

The increase in AFRs come as fuel prices continue to rise. Latest government data shows prices are far lower than the heights reached last summer, but are still higher than the average for 2023. Data posted by the RAC at the start of August showed the average price of petrol climbed for the second month in a row in July amid warnings of bigger forecourt price rises.

The new AFR tables are as follows (old rates in brackets):

The previous rates can be used for up to one month from the date the new rates apply. Hybrid cars are treated as either petrol or diesel cars for AFR purposes.

The full list of rates can be viewed here, along with the tables for calculating them.